The chase for Cable & Wireless Optus's mobile business has turned ugly, with Vodafone telling Australia's anti-monopolies watchdog that SingTel would be unable to feed the 'capital appetite' of a full service.
"Given the C&W Optus capital demands and relative size of SingTel, the SingTel bid presents a false choice to retain C&W Optus as an integrated carrier," said the confidential Vodafone submission to the watchdog obtained by Reuters.
"SingTel, and the commission, in one-two years could end up in the same position as we are now (with C&W Optus) as SingTel is unable to feed the capital appetite of an integrated C&W Optus."
"In the meantime, momentum will be lost and the commission may have less control over the fate of components of C&W Optus - especially the broadband network - than the commission can exercise now in relation to the Vodafone bid," it said.
SingTel under pressure
The document, being assessed by the Australian Competition and Consumer Commission (ACCC), also said that the capital requirements of a full service C&W Optus would be more than 300 percent of SingTel's current capital programme.
"The C&W Optus capital demands are well over AU$10 billion over the next five years," the document said, adding that Asia's eighth largest carrier was "already under pressure from capital markets for its strategy of pursuing a fully integrated model".
The market has been sceptical about unconfirmed media reports valuing SingTel's undisclosed cash-and-scrip bid for C&W Optus, Australia's second-largest carrier, at AU$4.50 or AU$4.60 a share.
Waiting on the Watchdog
The ACCC is yet to decide whether competition would be enhanced by C&W Optus being broken up under the Vodafone proposal or remaining as a full service carrier under the SingTel plan.
A decision is expected before the end of March.
The ACCC has sought the opinions of telecom suppliers, equipment makers and business groups to help its deliberations on Vodafone, the third largest mobile operator in Australia.
Nokia neutral
And with three foreign telecom carriers sweating on a ruling from the regulator, Nokia Oyj says it had a very neutral stance on the bidding process for C&W Optus, which is 52.5 percent owned by Britain's Cable & Wireless.
"We would be very neutral," Nokia Mobile Phone Asia Pacific senior vice president Nigel Litchfield told reporters after the company outlined its technology and regional strategy.
"Obviously today we have a relationship with both Vodafone throughout the world as well as Singapore Telecom. In that respect, we are neutral and would not support either operator in the bidding," he said.
Vodafone, the world's largest mobile phone company, has enlisted the support of Hutchison Telecommunications (Australia) in an attempt to alleviate anti-trust concerns.
Hutchison said last week it has held talks with Telecom NZ, which like Vodafone is hoping to secure the mobile assets of C&W Optus, on business arrangements.
SingTel would avoid a bidding war with Vodafone if the London-based company's plan won regulatory approval, a source close to the Asian carrier has told Reuters.
