OTE’s new telecom alliance

SINGAPORE (Reuters) – Singapore Telecommunications Ltd, Southeast Asia’s largest phone company, said yesterday it had formed an alliance with a unit of dominant Greek telecoms operator OTE. SingTel, which has similar arrangements with around 200 operators globally, said OTEGlobe would transfer Singapore calls to parties in Greece, the Balkans and southern Europe, while OTEGlobe would use SingTel as its Asia-Pacific traffic hub. The earnings impact from the partnership was difficult to estimate, said Syed Al Idid, analyst with ING Baring Securities. «Since there is no equity injection, the benefits to SingTel are quite limited and it’s hard to see any significant earnings impact,» he said. «But the deal could benefit SingTel users in terms of roaming discounts, perhaps.» SingTel, which has an 11.7 percent stake in Belgium’s dominant telecoms operator Belgacom, said the deal would focus on cutting costs and generating revenues through the exchange of voice traffic and other services. The Belgacom stake is regarded as a non-core asset and SingTel is expected to divest it when Belgacom goes public this year. OTEGlobe is a wholly owned unit of OTE, the dominant operator in the Greek market with a significant presence in the Balkans. The partners also said they will also explore launching global Internet Protocol telephony services in the Balkan region.