Telstra Reviews APAC Assets

Ongoing review of Asian assets to ensure shareholder value

December 23, 2010

1 Min Read

MELBOURNE -- Telstra has been conducting an ongoing review of its Asian assets to ensure they drive shareholder value.

In September, Telstra completed a successful IPO of SouFun, the leading Chinese real estate website, and will realise a gain on the sale of approximately $65m in its half-yearly accounts. Telstra has also reviewed its other assets in China, including the Octave business.

Octave comprises ChinaM, a supplier of consumer mobile content, and Sharp Point, which provides technical services for China Mobile's central mobile music platform. Telstra acquired a 67% stake in the businesses in February 2009 for $259m. Telstra first highlighted a potential impact on the Octave business in August 2010 following regulatory rulings that were expected to constrain the Wireless Application Protocol (WAP) market in China.

The impact of the rulings has been clarified and consequently, Telstra has now updated the Octave business plan with the result it is expected to record an impairment charge against the carrying value of the Octave investments of approximately $138 million. The Octave write-down will be recorded as an impairment in the results for the half-year ended December 2010. Neither the SouFun gain nor the Octave impairment will affect guidance, which explicitly excluded asset impairments and proceeds from asset sales.

Telstra remains focused on its investments in Asia. In Hong Kong, Telstra continues to see positive momentum in the mobiles business, CSL, with strong uptake of smartphones and the recently-announced launch of one of the world's first LTE networks.

Telstra Corp. Ltd. (ASX: TLS; NZK: TLS)

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like