Singapore Telecommunications Ltd., Southeast Asia’s biggest phone company, plans to keep its Australian satellite unit after concluding a strategic review.
“Based on the review, SingTel is committed to growing and investing in the satellite business,” the company said in a statement yesterday.
SingTel was seeking more than A$2 billion ($1.8 billion) for the Optus Satellite unit, which provides television, radio, phone, Internet data and military signals to Australia, New Zealand and the Antarctic, people familiar with the matter said in July. The company was considering an initial public offering of the business after drawing lower-than-expected bids, people with knowledge of the process said last week.
Optus Satellite attracted bidders including Intelsat SA, the Luxembourg-based commercial satellite operator, people familiar with the matter said Aug. 9. A group that included Measat Global Bhd., TPG Capital and Blackstone Group LP dropped out of bidding and signaled to SingTel that it wasn’t willing to pay more than $1.7 billion, according to a person with knowledge of the deliberations.
SingTel bought the business as part of the takeover of Optus, Australia’s second-largest phone company, in 2001. In March, SingTel said it was considering options for Optus Satellite. It hasn’t reported separate earnings figures for the unit since the 2001 takeover.
Facing slowing sales in Australia and Singapore, SingTel is seeking new sources of growth. Divesting Optus Satellite, which had revenue of A$319 million in the year ended March 2012, would help finance the S$2 billion ($1.6 billion) of acquisitions that SingTel is planning.
With five spacecraft in orbit, Optus Satellite broadcasts signals to more than two million Australian households and companies and will launch a sixth satellite this year, according to SingTel. Its customers include state-owned Australian Broadcasting Corp., the Foxtel joint venture between Telstra Corp. and News Corp., and Australia’s Department of Defence.