HUTCHISON Whampoa is negotiating with two foreign telephone companies for the sale of its loss-making subsidiary, Hutchison Telecom UK.
The companies are Telstra OTC Australia and Deutsche Bundespost Telekom of Germany.
Sources close to Telstra have confirmed that it is interested in Hutchison Telecom UK but industry sources say Deutsche Bundespost Telecom is favoured to seal the deal.
Hutchison managing director Simon Murray is understood to have recently returned from Australia and Hutchison's UK managing director, Hans Snook, is said to have arrived in Hong Kong late last week.
Neither Mr Murray nor Mr Snook would comment on the negotiations.
Keith Mallinson, research director for telecommunications analysts Yankee Group Europe, said he saw the synergy between Telstra's operations and Hutchison Telecom UK.
''Telstra has a lot of ambition abroad and is bidding for the British Government's telephone network contract. Hutchison's mobile operation would complement this. They could leverage off one another, and it is that sort of synergy which will make the mobile operation a more realistic project in the present competitive marketplace.'' Hutchison Telecom UK comprises the Rabbit telepoint operation, a service provider for a cellular operation, and a personal communication network (PCN) licence.