Share trading in the carrier was suspended this afternoon.
Following a report in the Australian Financial Review today claiming that Telstra has formed a $5 billion alliance with PCCW, the carrier issued a statement to the Australian Stock Exchange confirming that discussions are underway.
According to the statement, Telstra and PCCW are in "an advanced stage of agreeing a Memorandum of Understanding" to form an Asia-Pacific alliance. "Key aspects of the agreement are likely to involve the pooling of selected regional assets and cash into several joint ventures."
According to Telstra, finalisation of the agreement is subject to due diligence, regulatory and board approvals as well as the completion of the PCCW and Cable & Wireless Hong Kong merger, announced recently.
Telstra officials would not reveal details of the negotiations, but according to reports, Telstra is expected to take a major stake in PCCW's mobile telephony business after PCCW takes over Cable & Wireless HKT.