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Subject:  One.Tel sale-tough task Date:  6/14/2001  9:25 AM
Author:  nutsandbolts Number:  5 of 9

Lucent One.Tel network sale seen tough task


By Simone Deane
MELBOURNE, June 14 (Reuters) - Lucent Technologies Inc is
unlikely to get much of a return on the sale of a mobile
network it built for failed Australian telecoms group One.Tel
Ltd in a market short on cash, analysts said on
An executive from the U.S. telecoms equipment giant said in
Hong Kong on Wednesday that the group expected to get "good
value" for the network.
"And pigs might fly," said independent telecoms analyst
Paul Budde.
Budde said that even though the equipment was first class
he expected it to go at a bargain rate, A$200 million (US$106
million) to A$300 million at best, even if Lucent bought
One.Tel's spectrum rights to accompany the network from the
The 2.5 generation-capable network Lucent was building for
One.Tel was to cost more than A$1 billion but construction was
not complete when One.Tel was put into administration in late
Lucent, One.Tel's largest secured creditor, had submitted a
A$1.28 billion claim, including more than A$600 million for
network construction, according to One.Tel's administrator.
Analysts said there were not a single clear candidate that
would have a lot to gain by picking up the unfinished network.
"It's hard to see who the buyer will be given that the
existing players are fairly well focused and the equity out
there is not really available for someone to come in and say
'hey this is a good new opportunity'," said Peter McIver,
telecommunications partner at Deloitte Touche Tohmatsu.
New entrants were considered unlikely as, with telecoms
stocks out of favour, it was hard to raise money, while the
failure of the News Corp Ltd and Publishing &
Broadcasting Ltd backed One.Tel has raised doubts that
the Australian market could support another player.
Australia's biggest mobile players, Telstra Corp Ltd
, Cable & Wireless Optus Ltd and Vodafone
Pacific, a unit of Vodafone Group Plc , already have the
network infrastructure they need, analysts said.
There was speculation that smaller player Hutchison
Telecommunications Australia Ltd could be interested
in buying the network but analysts said that move was not
logical, particularly given its alliance with Telecom Corp of
New Zealand Ltd .
Telecom and Hutchison Australia and its parent company
Hutchison Whampoa Ltd <0013.HK> signed a strategic alliance to
jointly provide 3G mobile services in Australia and New
This deal also made it unlikely Telecom would be a bidder,
analysts said.
Budde said there was a chance that resellers, such as
Primus Telecommunications Group Inc's Australian unit,
may consider purchasing the network if it was cheap enough and
it appeared to be a better option than continuing to pay
wholesale fees.

Rtr 00:27 06-14-01

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