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Optus opts against selling satellite business

SingTel subsidiary Optus has decided against selling its legacy satellite business after an internal review.
Written by Josh Taylor, Contributor

SingTel has opted to keep Optus' 25-year-old satellite business after an internal review of the division that could have potentially seen the business sold off or listed.

The business, which Optus today reported has maintained stable revenues at AU$83 million for the quarter ending June 30, had been in review with Credit Suisse and Morgan Stanley since March, with SingTel saying that it was looking at optimising the value for shareholders.

But today, SingTel announced to the market that it wouldn't go ahead with the deal, stating that the conclusion reached as a result of the review was to continue to invest and grow the business from within Optus.

SingTel Consumer CEO Paul O'Sullivan told journalists this afternoon that the satellite division is a "terrific business" that dominates the Australian and New Zealand footprints.

"It's a very modern fleet, and it was all updated over the last decade, and it is one of the youngest fleets in the industry," he said.

O'Sullivan wouldn't rule out selling or listing the business in the future, but said that for now, it will remain with Optus.

"Obviously, we'll keep our options open and keep reviewing the landscape, but right now the conclusion is to keep the business and invest in it, and grow it under our own flag. Clearly, there will always be options for us to consider things in the future like an IPO."

On the call, Optus CEO Kevin Russell revealed that Optus is building momentum in its 4G business, and has now sold 1.08 million 4G handsets. However, this is almost one third of the total number of 4G devices Telstra has sold, according to the figures the company released last week.

Russell said that Optus' dip in customers from 9.59 million to 9.53 million is just a sign of maturity in the post-paid subscriber market.

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