Hutchison Telecommunications International Ltd. (NYSE: HTX) has agreed to the sale of its 51.31 percent controlling stake in Partner Communications Co. Ltd. (Nasdaq: PTNR; London: PCCD), its Israeli subsidiary, to Scailex an Israel-based importer of mobile phones, for 5.29 billion Israel New Sheckels (US$1.381 billion).

Both sides expect the deal to be completed in the next three months once the necessary hoops have been jumped through. These include clearance from the Israeli Ministry of Communications and the Antitrust Commissioner.

HTIL CFO, Christopher Foll, confirms that the company expects pre-tax profits from the sale of $1 billion. He would not confirm what, if any, capital gains tax the company would pay but made assurances that any tax bill would not "significantly impact" the $1 billion figure.

HTIL has made no secret of the fact that it has been looking for a buyer for Partner. The company's CEO, Dennis Lui, explains that, although it is a good business, it is in a mature market with limited growth opportunities and a long way from Hong Kong.

Lui also confirms that HTIL is continuing its attempts to sell its operation in Thailand and says that now the changes in Hutchison CAT Wireless Multimedia Ltd. 's board have taken place, discussions could be reinvigorated. However, he cautions that no fixed timetable for negotiations was in place yet.

Lui says the sale of Partner will unlock value for the company, either to invest in developments or to deliver increased dividends to investors. The decision on where the money will go will be taken by the HTIL board once the sale has gone through.

Israel really was the odd man out in HTIL's portfolio, and once the sale is completed, HTIL will be left with holdings in Indonesia, Sri Lanka, and Vietnam, as well as Thailand. The Hutch Group's 3 assets in Europe and outside of Hong Kong fall under the H3G business of Hutchison Whampoa Ltd. (Hong Kong: 0013; Pink Sheets: HUWHY), and Hong Kong is another separate business.

However, HTIL also gives up a profit-making operation.

Partner is the second largest operator in Israel by subscriber, and the Israeli business contributed 5.61 billion Hong Kong dollars ($734 million) in the first half of the year and HK$2.093 billion ($270 million) in EBIDTA on a margin of 47.3 percent. That is out of a total group revenue of HK$6.411 billion ($827 million), according to the company's unaudited results that were issued close on the heels of the sale announcement.

HTIL is instead following a clear strategy to aggressively pursue its high growth markets and CFO Foll points to promising signs coming from both Indonesia and Vietnam.

Foll says the company's Indonesian operation has taken a turn for the better following the calming of intense price competition in the country that has seen prices fall 40 percent, most of which was in the first half of this year.

He claims the second quarter has been much more stable and also points to revenue growth from data and SMS. In the first half, this accounted for 35 percent of the Indonesian company's HK$223 million ($28.77 million) revenues. This is significant growth from SMS -- as Foll says, "It wasn't so long we weren't getting anything from it."

HTIL re-launched its Vietnamese business with GSM technology in the second quarter, and Foll says, "Compared to our TDMA experience, it's very positive." He cites subscriber figures "touching 900,000 as we get through August" and an initial ARPU of $3.7. But he says he personally expects this to settle downwards as the service matures.

The expansion plans for both countries is aggressive, and HTIL says that it is on track to meet its targets for 3,000 and 9,000 base stations to be live in Vietnam and Indonesia, respectively, by the end of the year.

This expansion comes despite a reduction in the company's guidance for capex for the year. This has been brought back from HK$7 billion ($903 million) to HK$5 billion ($645 million), a drop Foll puts down to savings made from network sharing in Indonesia and some "very aggressive vendor financing" that will defer payments for a couple of years, when the services should be delivering greater revenues.

— Catherine Haslam, Asia Editor, Light Reading