Big brother C&W backs legal move

PUBLISHED : Thursday, 11 September, 1997, 12:00am
UPDATED : Thursday, 11 September, 1997, 12:00am

The Optus decision to sue its much bigger rival, Telstra, is being seen as further indication Cable & Wireless, which took control of Optus two months ago in a A$980 million deal (about HK$5.53 billion), is taking an increasingly firm hand in determining its destiny.

One telecom analyst in Sydney said yesterday: 'C&W is definitely taking control and forcing a few issues. This action may well have happened anyway but it certainly makes it easier for Optus to pursue the legal action knowing it has the strong support of the C&W management behind it.' Another added: 'Behind the scenes, it's clear that having C&W behind it has given Optus the confidence to fight its corner.' A spokesman for Optus said yesterday Optus had been working on its proposed legal action against Telstra for several months, but added significantly: 'C&W fully support this action. It is a big step to take and the fact that we have the full support of the board is important.' Analysts pointed out, however, the hardest step for Optus and C&W may be yet to come - that of working out how to extricate the group from its fledgling pay TV operation Optus Vision, which is losing the group millions of dollars a year.