Australia’s telecommunications landscape may soon see major change, as Optus owner Singtel Group confirmed that it was preparing to sell a major stake in the company to private investors after several horror years in which Optus has racked up mounting financial liabilities.

Singtel has confirmed that it has been in discussions with multiple potential buyers but did not name them and has so far declined to provide additional details – although the Australian Financial Review has named New Zealand infrastructure investor Morrison as the suitor.

Aiming to strengthen Australasian control over the telco after a quarter century as one of myriad Singtel Group subsidiaries, Morrison is reportedly leading a consortium of investors – including at least six superannuation funds – in a push to buy more than 30 per cent of Optus.

The deal is estimated to be worth around $2.25 billion on an estimated equity component of $7.5 billion and a total valuation of $14 billion – but reports suggest Morrison believes Optus, as a “critical business in [a] stable market,” is currently “undervalued” and has room to boost revenues.

It’s not the first time Singtel has talked about reducing its stake in Optus: in May, the company said it was looking for a “like-minded long-term local partner” to take up a stake in the Australian telco, ideally with a view to bringing “expertise to improve service provision and quality.”

And in 2024, Optus said it was in talks to sell part of its share to infrastructure investor Brookfield Asset Management, but those negotiations collapsed.

Have the numbers stopped adding up?

Singtel has owned Australia’s second largest telecommunications company since 2001, during which time it has built up a user base of around 11 million mobile subscribers and 1.3 million broadband services, with a nationwide mobile network second in scope to only that of Telstra.

Optus recently reported fiscal 2026 revenues of $8.345 million, investing $1.5 billion in its networks and boosting EBIT by 23.1 per cent – to $550 million – due to what the company called “increased network monetisation as the business focuses on disciplined execution.”

In recent years, a series of disasters – including a cybersecurity breach in 2022, a network outage in 2023 and another last year that has been linked to multiple deaths – have attracted the wrath of regulators and cratered its reputation, cementing its position as Australia’s least trusted company.

And while Singtel was mulling the partial sale of Optus months ago, confirmation of the latest deal comes as Optus faces yet more financial and reputational liability after ACMA commenced legal proceedings against the company, alleging 1,005 legal breaches that could cost it $250 million.

That looming liability, and the challenges of growth in a largely saturated Australian telecommunications market, could taint the appeal of Optus for potential investors, with analysts reporting “pessimistic” investor outlook that has seen revenues flat and shares declining overall.

With data growth “slowing significantly” – from 40.1 per cent in June 2020 to 4.3 per cent at the end of 2024 – analysts have warned surging traffic volumes are not translating into revenue growth in a market where competition has pushed prices down and slim margins have forced price rises.

A pivot towards AI infrastructure?

Optus therefore carries a range of risks for its new buyers, who will take a large stake – and potentially significant penalties – during a time when global telecommunications market growth is near flat, with Analysys Mason projecting just 1.3 per cent annual growth through 2030.

Telecom revenues are largely driven by saturated mobile services and fixed broadband markets that deliver three-quarters of all telecoms revenues – but growth in demand for AI infrastructure has been flagged as providing new growth opportunities, and carriers are shifting accordingly.

Singtel Group has since been shifting its business towards AI and undertaking an asset recycling program that has included selling a $1.11 billion (S$1 billion) stake in Thai energy firm Gulf Development, and selling a $1.66 billion (S$1.5 billion) stake in India’s Bharti Airtel.

It has also been wooing SMEs, and partnering with industry groups and service providers, as it launched a $350 million ($US250 million) global AI Growth Fund in March and secured a $1.66 billion (S$1.5 billion) credit facility with a cohort of 11 banks, in Australia and elsewhere, in May.

And while current reports suggest Singtel will retain a stake in Optus – which could potentially see the Australian carrier dovetail with those investments to consolidate its position in Australia’s AI infrastructure market – its pivot away from Australia after 25 years confirms change is coming.