Telstra looking at Leighton telecoms assets

Australian incumbent's war chest to grow considerably thanks to NBN Co deal.

Telstra Corp. is looking at telecommunications infrastructure assets that Leighton Holdings Ltd. has put up for sale, a Telstra spokeswoman said Friday.

Leighton said in September it was exploring the potential divestment of its Nextgen Networks, Metronode and Infoplex assets. Nextgen owns and operates Australia's second largest long-haul fiber optic network connecting capital cities and major regional centers, Metronode owns data centers and Infoplex offers cloud computing services.

"We're just having a look," said a spokeswoman for Telstra.

Telstra has a considerable war chest available to grow its business as it expects to reap 2 billion Australian dollars (US$2.08 billion)-A$3 billion in excess free cash over the next three years flowing from its A$11 billion deal with NBN Co.- the company rolling out Australia's high speed internet network - to switch off its copper-based network and transfer its customers.

Any bid for Nextgen by Telstra or rival Singtel's Optus could face regulatory hurdles with the Chairman of the Australian Competition & Consumer Commission, Rod Sims, telling the Australian Financial Review newspaper:"If either of those two are thinking about buying it (Nextgen), we would have to look at it very, very closely."

Telstra is aiming to build its growth businesses such as network applications and business services, which include areas such as cloud computing. Late last month the company bought South Australia state-based internet provider Adam for an undisclosed amount, which it will run as a stand-alone business.Macquarie Capital is advising Leighton on the sale process.
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