Telecom talks of AAPT shakeup instead of sale

Telecom has denied it has put its Australian subsidiary AAPT up for sale again after failing to find a buyer for the troubled business this year.

Australian media reported yesterday that Telecom was in discussions about selling its Australian retail fixed-line business to New South Wales-based company Soul, and in separate talks with infrastructure company Powertel to build broadband internet services.

A Telecom spokesman said the company had not put AAPT up for sale again.

It is understood Telecom is aiming to announce a restructure of the business at its first-quarter results next week.

The company also aims to provide an update on the review of its Yellow Pages group and announce a new technology partner.

At its previous quarterly earnings, Telecom said it would retain AAPT rather than selling it and invest A$120 million ($137 million) in the business.

Shares in Telecom closed at $4.36 yesterday, down 2c.

Telecom has written off $1.165 billion from AAPT's value in less than a year, dropping it to $270 million.

The latest writedown was largely caused by hefty increases in the unregulated wholesale prices AAPT pays for services it buys from Telstra to sell to its customers.

Telecom chief executive Theresa Gattung had defended Telecom's decision to hold on to AAPT, saying the company needed a presence in Australia to service New Zealand customers.