Optus could be sold to Canadian private equity giant in $18 billion deal

Optus – or at least a significant share of it – could be offloaded to a private equity firm in a deal worth up to $18 billion.

Singtel, the company’s Singapore-based owner, is reportedly discussing a sale of Australia’s second-largest telco with Canadian asset manager Brookfield – a move that, if it goes through, could spark a price war that would benefit Australian customers.

“Consumer-wise… it’s actually probably a good thing,” analyst Evan Lucas said.

“In the short term they probably will create a price war because they know they can grab market share really quickly,” he added.

However, any such deal is still likely a fair way away.

“Yes, they’re in ‘advanced talks’, but advanced talks does not mean a deal,” Lucas said.

“The price clearly still hasn’t been settled.”

Even if an agreement is reached between Singtel and Brookfield, any deal would come under close scrutiny from Australian regulators given telecommunication services are considered essential infrastructure.

“The regulator is the unknown quantity here and they will have a lot to say,” Evans said.

Singtel has owned Optus since 2001, but the Australian telco has caused headaches for its Singaporean parent company in recent years.

The high-profile data leak severely damaged Optus’ reputation in 2022, before last year’s mass outage impacted emergency calls and left millions of customers without phone service for the best part of a day.

Singtel said last month that the outage cost it $61 million.

Last week, polling firm Roy Morgan said the telco remains the most distrusted brand in Australia on the back of the two incidents, which led to the departure of former CEO Kelly Bayer Rosmarin late last year.

“It’s been some time since the Optus breach… but they haven’t really been able to turn around sentiment,” Roy Morgan CEO Michele Levine said.

Last week, it was announced that Lambo Kanagaratnam, the managing director of networks who was in charge of Optus’ technology and operations during the outage, was leaving the telco after nine years.