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Telecom sale seen

PA Wellington New Zealand Telecom will probably be privatised before the 1990 Election, the British telecommunications company, Cable and Wireless, says. The Telecom float would be a four-way split with about a third going to a New Zealand investment company, a third to the public and the remainder to two overseas companies, the Cable and Wireless Asia Pacific regional manager for corporate strategy, Mr Michael Blendell, said after discussions with Treasury last week. Mr Blendell believed the sale would come before the election because the Caygill Budget depended on raising money from asset sales.

The Air New Zealand float was a model for selling Telecom, he said. Though the Government had fixed its sights on a price-earnings ratio of 14 when setting the price of shares, he thought it would be fortunate to get it, given the depressed market. • Cable and Wireless owns telecommunications companies in Bermuda, Barbados, Maldives and most lucratively Hong Kong. It also has minority stakes in Fiji International Telecommunication, Solomon Telekom, three Philippines Telecom companies and Bahrain Telecommunications.

For the year ended March 31; 1989, Cable and Wireless Asia Pacific operations contributed 58.25 per cent of total turnover of $4 billion.

Cable and Wireless is also the company behind the British domestic Mercury network, which provides rival commercial toll services and telephone boxes to British Telecom. It has been granted a licence to operate a CT-2, or limited cordless phone service, called Telepoint. j Mr Blendell said installing a CT-2 network would cost no more than SIOM for New Zealand main centres. CT-2 would be followed by PSN, a send-and-receive cordless telephone, which could be available as early as

1991. CT-2 suffers from the drawback that users must be within 50 metres of a base station and cannot receive calls. Cable and Wireless is among the companies responding to the New Zealand Commerce Ministry’s call for expressions of interest in rights to the radio spectrum. Cable and Wireless said it might go ahead with a cordless telephone system here in spite of the Government last week preventing its proposed partner, NZ Post, from participating. The system will transmit calls from cordless telephones within the range of transmission bases in busy places such as airport terminals, petrol stations, shopping centres and post offices usually up to 200 m. Options being considered include finding a new partner and acting independently. The decision against NZ Post puts Telecom, which has announced a partnership with the telecommunications company, GPT, to test a cordless telephone system in Wellington, at the head of the queue to introduce such a service.

GPT NZ’s managing director, Mr Wayne Singleton, said the trial with Telecom would run from the middle of next year until early 1991. Forty bases will be installed in Welling-, ton’s central business district, chosen because of its compactness, with 500 selected users. The trial should indicate who likely customers would be, what to charge and where to install bases, he said. GPT’s receivers are likely to sell for $5OO with calls charged at slightly more than standard rates.

NZ Post applied to the Government for permission to form a similar partnership with Cable and Wireless to set up a series of bases around New Zealand.

The Minister of State-owned Enterprises,' Mr Rodger, said that the reason Telecom was allowed to work on a cordless telephone system while NZ Post was not, related to statements of corporate intent drawn up for all State-owned enterprises.

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Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/CHP19891205.2.141.8

Bibliographic details

Press, 5 December 1989, Page 46

Word Count
575

Telecom sale seen Press, 5 December 1989, Page 46

Telecom sale seen Press, 5 December 1989, Page 46