Hutchison, which has been reselling the Optus digital mobile service for over six years -- most recently under the Orange GSM brand - has a resale base of about 260,000 customers.
In an attempt to ensure uninterrupted service to customers, the junior player -- currently in discussions with Union officials regarding redundancy arrangements -- will continue to service customers during the transfer period, pocketing AU$10 million from Optus -- the fully-owned subsidiary of Singapore Telecommunications -- for its troubles.
Hutchison CEO Kevin Russell said it was discontinuing GSM resale as this was a non-core business. "As we move forward we are focusing on our CDMA and 3G operations where we own network infrastructure," he said in a statement.
In a separate agreement, the telcoms duo have signed a long-term transmission capacity deal, including an ongoing operation and maintenance contract, the aggregated value of which is estimated to be over AU$60 million for Optus, according to the statement.
The transmission capacity will link Hutchison's Sydney, Melbourne, Brisbane, Adelaide and Perth operations and will support both the existing CDMA and future 3G networks.
To top off the agreements, Hutchison has also signed a Memorandum of Understanding (MOU) with Optus for the provision of national roaming services to its 3G customers. -These roaming services are a critical requirement for our 3G launch," Russell said.
"These deals confirm our commitment to launching 3G services in Australia late next year," he added.
However, telecommunications analyst Paul Budde told ZDNet in a previous interview that he believes 3G will be just another thorn in the struggling telco's side.
Although Hutchison claims its 3G services will be rolled out in 2002, the wider belief is that 3G won't eventuate in Australia until about 2004. -Long before this time Hutchison needs to find another solution," Budde said. 3G is just -another burden on its plate," he added. "Whatever direction you look, there's no way forward for Hutchison."
Optus will contact Orange customers in the near future. "In the meantime, it is business as usual. They will be billed as normal. Their coverage and contracts will remain unchanged until they choose the Optus option which best suits their needs," Optus CEO Chris Anderson said.
Orange GSM customers with questions about the transfer and how it effects them can call Optus's Information Line on 1300 133 546 or visit www.optus.com.au.
The Communications and Public Sector Union (CPSU) has been in discussions with the struggling telecoms player this morning to discuss possible retrenchments.
The Union has also lodged an application for an interim redundancy award with the Australian Industrial Relations Commission (AIRC), following concerns that there are insufficient retrenchment provisions available under workers' contracts.
