Telecom confirms $390m Aussie deal

Hutchison Telecoms Australia has agreed to sell stock worth A$330.6 million (NZ$394 million) to Telecom subsidiary Telecom 3G.

The deal, first announced by Telecom in August, will transfer its 19.94 per cent stake in Hutchison subsidiary Hutchison 3G Australia and give Telecom to a 10 per cent stake in Hutchison Telecoms Australia.

It includes the option of Telecom raising its shareholding to 19.94 per cent. Telecom spokesman Phil Love said one of the possible benefits would be for both companies' customers to roam on each other's networks.

Hutchison has a W-CDMA network and Telecom's wide band W-CDMA network is expected to be completed in November next year.

Mr Love said both companies already had good working relations and he expected closer cooperation.

Early this year, Telecom chief operating officer for technology Mark Ratcliffe suggested Hutchison and Telecom could combine to source W-CDMA phones.

Under the agreement, if Telecom wanted to take another 9.94 per cent stake in the company, the option has an escalating strike price of A$250 million on December 31 this year, A$275 million on June 30 next year and A$300 million on December 31 2008.

Hutchison Telecoms Australia is owned by Hong Kong group Hutchison Whampoa.