SingTel seeking US$1.93 billion for Optus Satellite unit

Singapore, June 3, 2013 — Singapore Telecommunications Ltd. (ST), Southeast Asia’s biggest telco, is seeking more than US$1.93 billion (Au$2 billion) starting bid for the sale of its Australian satellite unit, according to various media reports.

Among those companies that have reportedly shown interest for Optus Satellite are Eutelsat of Paris and private equity investors KKR, Carlyle Group, Blackstone Grp and Providence Equity Partners.

Currently the Optus satellite fleet consists of five geostationary satellites providing satellite services across Australia and New Zealand and to McMurdo Sound in the Antarctic. Another satellite, Optus 10, is scheduled for launch this year.

Optus Satellite provides television, radio, phone, Internet data and military signals to Australia, New Zealand, and parts of the Antarctic. It broadcasts signals to more than two million Australian households and companies.  Its customers include state-owned Australian Broadcasting Corp., the Foxtel joint venture between Telstra Corp. and News Corp., and Australia’s Department of Defence.

SingTel, which acquired the satellite arm when it bought Optus in 2001 for US$13.54 billion (Au$14 billion), has been struggling to increase its earnings because of slowing growth in Singaporean and Australia mobile use. Optus reported an EBITDA income of some US$203.14 million (Au$210 million) last year.

In March this year, Singtel announced that it was conducting a strategic review of its Optus Satellite business, raising speculations the company’s sale was imminent. Singtel even hired Credit Suisse Group AG and Morgan Stanley to study SingTel’s options.