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Optus to take on Asia-Pacific with satellite business

Optus and SingTel will create three new integrated business units (IBUs) which will result in greater efficiency and improved customer service.

Previously run as separate operations, both companies' respective International Satellite, International Carrier and International Network businesses will combine. The three IBUs will be responsible for the SingTel Group's operations globally.

The new International Satellite Business IBU will be managed from Australia and will operate throughout the Asia-Pacific region, while the International Network and International Carrier Services IBUs will be managed from Singapore.

Chris Anderson, Chief Executive of Optus, said the changes would bring immediate benefit to Optus customers.

"The new IBUs will deliver all the benefits of regional scale, reach and diversity to customers. When dealing with Optus or SingTel international and satellite services, our customers will be dealing with the region's most powerful operator," he said.

Optus is already the leading satellite communications provider in Australia, with a satellite footprint covering Australia, New Zealand, Papua New Guinea and the Pacific.

"Optus is well positioned to springboard its satellite expertise into the greater Asia-Pacific region. This move sees our satellite business become the second largest regional satellite operator in the Asia-Pacific, and a strong contender for the 'number one' spot.

"Optus customers - and those of the wider SingTel Group - can now access more than 25 satellites across the region. The satellite IBU will provide comprehensive satellite communications services, address new markets and exploit the economies of scale of a large fleet operator," Mr Anderson said.

Lim Toon, SingTel's Chief Operating Officer, said the formal integration process began as soon as the SingTel acquisition of Optus was completed. Teams from the two companies examined areas that would best function as integrated units.

"SingTel and Optus will be stronger together rather than as two separate organisations. Creating the new IBUs shows is part of our effort to drive the combined strengths of the companies and reap the synergies of merger.

"Bringing the international carrier and networks businesses of SingTel and Optus together consolidates the Group's buying power, magnitude and scope.

"Besides the three IBUs announced today, further work to extract operational synergies is continuing.

"The SingTel Group is now the leading communications operator in Asia, and - as we outlined at our last results - we estimate that cash savings of S$300 million can be achieved over the next eighteen months through integrating the businesses of SingTel and Optus," Mr Lim said.

About 80 per cent of the integration savings will come from a reduction in capital expenditure - mainly through optimising the Group's international cable networks and better prices from equipment vendors. Most of the savings will be realised in the next financial year.

Synergies are also expected from reduced operating expenses, such as lower international traffic costs, and gains in revenue from increased sales to corporate customers in Australia.

The new International Satellite Business IBU will operate and manage five satellites covering Asia, Australia and New Zealand; 13 satellite earth stations; three Tracking, Telemetry and Control facilities; as well as agreements that allow access to 25 satellites across the region.

Bob Murray, currently General Manager, Optus Satellite, will head the Satellite Business IBU and will report to the Optus Business division - which is led by Managing Director, Chris Hancock.

The new International Network and International Carrier Services IBUs will manage the assets of SingTel and Optus in a streamlined, regional/global operation comprising cable, switch and other wholesale data businesses. The enlarged SingTel Group benefits from more points of presence throughout the Asia-Pacific region, Europe and North America.

The International Carrier Services IBU will centrally manage all international voice and data traffic of the Group, leverage the Group's carrier relations, negotiate rates for terminating traffic, provide wholesale voice, data and other value-added services through the Group's global voice multi-service network.

The International Network IBU will centrally plan the Group's requirement for international network and utilisation, manage the costs of submarine cable, satellite and backhaul facilities, and coordinate the private submarine cable businesses that SingTel is involved in to maximise the benefits to the Group.

Richard Tan, currently Vice President (International Carrier Services) with SingTel, will head the International Carrier Services IBU. Ng Seng Sum, currently Chief Operating Officer of New Century Infocomm Company in Taiwan (a SingTel associate) will lead the International Network IBU. The two IBUs will report to Lim Shyong, SingTel's Executive Vice President (Global Business) in Singapore.

All three IBUs will have staff based in Singapore and Australia.

Optus will continue to operate its wholesale business from Australia, with the newly appointed (and recently ex-Telstra), David Rampa to take up the position of Director, Wholesale in February 2002.

For more information:
Stephen Woodhill
Optus Public Affairs
Phone: + 61 2 9342 7850

Andrienne Tho
SingTel Corporate Communications
Phone: +65 838 4934