Mobile phone operator Hutchison Telecommunications has pulled out of talks with Vodafone on the back of SingTel's plans to buy Cable & Wireless Optus for AU$17.2 billion.
UK giant Vodafone, which took a U-turn out of the bidding war for C&W Optus yesterday, had previously struck a deal to on-sell one million subscribers to Hutchison in a move to bypass anti-trust laws if it succeeded in acquiring Australia's second largest mobile phone carrier - C&W Optus.
Hutchison confirmed the termination of the deal this morning.
"While we were optimistic about the potential surrounding the proposed agreement with Vodafone, this was always a purely speculative opportunity for us," Hutchison MD Barry Roberts-Thomson said.
"Despite this decision, our strategy remains unchanged - we are very committed to developing our Orange One business and Hutchison is on-track to be an early entrant in the delivery of third generation (3G) services in Australia which we believe will create the next wave of growth in mobile telecommunications."
Last week Hutchison shelled out AU$196.1 million on third generation (3G) spectrum licences, acquiring licences in Sydney, Melbourne, Brisbane, Adelaide and Perth.
Hutchison shares were trading 14 cents lower this morning at 84 cents after a 14 percent plunge that followed the news that SingTel had pushed Vodafone out of the bidding arena.
In dropping out of the C&W Optus bidding, Vodafone said it had reached the conclusion "it would be unable to conclude a transaction that would be in the best interests of its shareholders".
"We are committed to growing a profitable business in Australia. The proposed transaction simply did not meet our return criteria," Vodafone CEO Brian Clark said.