Hutchison sells GSM customers to Optus

Troubled telecommunications player Hutchison will offload its GSM mobile customers to Optus for A$43 million (US$22 million).

SYDNEY--Troubled telecommunications player Hutchison will offload its GSM mobile customers to Optus for A$43 million (US$22 million).

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 will continue to service customers during the transfer period, pocketing A$10 million from Optus for its troubles. Optus is a fully-owned subsidiary of Singapore Telecommunications.

Hutchison CEO Kevin Russell said the company is discontinuing its GSM resale business, as it is a non-core business. "As we move forward we are focusing on our CDMA and 3G operations where we own network infrastructure," Russell said in a statement.

The company is also in discussions with Union officials regarding redundancy arrangements.

In a separate agreement, the telcos have signed a long-term transmission capacity deal, including an ongoing operations and maintenance contract. The aggregated value of the deal is estimated to be worth over A$60 million to Optus, a statement said.

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.

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...(and) confirm our commitment to launching 3G services in Australia late next year," Russell said.

However, telecommunications analyst Paul Budde said in a previous interview that he believes 3G will be just another thorn in the struggling telco’s side.

Although Hutchison claims that 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. According to him, 3G is just "another burden on its plate...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," said Optus CEO Chris Anderson.

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 also been in discussions with the struggling telecoms player, to discuss possible retrenchments.

The Union has lodged an application for an interim redundancy award with the Australian Industrial Relations Commission (AIRC), following concerns of insufficient retrenchment provisions available under workers’ contracts.