Vodafone silent on Optus bid

SYDNEY - Vodafone Group has offered $A11 billion ($13.8 billion) for the mobile phone assets of Cable & Wireless Optus, and both companies are prepared to work together to overcome antitrust concerns, says the Sydney Morning Herald.

Optus spokesman Steve Wright described the report as speculative, while Germaine Graham, a spokeswoman at Sydney-based Vodafone Pacific, declined to comment.

Vodafone's bid was part of a $A17 billion offer for the mobile, data and cable assets of Australia's No. 2 phone company, the newspaper said, without naming sources.

Vodafone, the world's largest mobile phone company, agreed last month to spend $US6.3 billion ($14.2 billion) on acquisitions in Ireland and Japan.

Buying Optus would help Vodafone, which already owns Australia's No. 3 cellular phone network, to compete with the country's biggest phone company, Telstra. If accepted, the bid would also stymie Telecom, which sees the Optus mobile network as part of its Australian expansion.

Australia's anti-trust regulator, the Australian Competition and Consumer Commission, may object to a Vodafone purchase of Optus unless the British company sells part of its mobile phone business in Australia, analysts say.

ACCC chairman Allan Fels was not available for comment.

Australian Equities Research analyst Michael Gordon said there was an outside chance Mr Fels would approve a Vodafone bid.

The telecommunications landscape had "become a lot more competitive" since Mr Fels refused in early 1999 to allow Optus to merge with rival AAPT.

Telecom later bought AAPT.

Vodafone would sell one of its mobile networks and about 1 million wholesale customers to help appease the ACCC's concerns, the Sydney Morning Herald said.

The offer values Optus' mobile customers at $A3600 each.

When Telstra renegotiated last year what it would pay Hong Kong's Pacific Century CyberWorks for control of its mobile business, its per-subscriber price fell to $A3000 from $4000.

A merger between Vodafone and Optus would also pave the way for the British company to sell shares to the public in its Australian unit this year, the newspaper said.

Vodafone Australia, a unit of Vodafone Group, scuttled a planned $A2 billion share sale in June after technology stocks fell out of favour worldwide.

Vodafone offered $A5 billion for Optus's corporate data business and $A1 billion for consumer and multimedia operations.

Cable & Wireless, a 53 per cent shareholder in Optus, would buy back the data business, and another buyer would be found for the multimedia unit, the newspaper said.

Vodafone was willing to pay top dollars for the Optus assets, since the acquisition would give it its best chance of becoming the No.1 mobile operator in the market, the report said.

Separately, the Australian Financial Review reported without citing sources that the two companies had agreed to exchange "commercially sensitive information" as Vodafone reviewed Optus' books.