Telstra buys major stakes in 2 firms

By Cathy Ding | February 12, 2009, Thursday |

Print Edition

TELSTRA Corp, Australia's largest telephone company, announced yesterday it has bought controlling stakes in two Chinese online mobile service providers for a total of A$302 million (US$198 million).

The all-cash acquisition will give the Melbourne-based company a 67-percent stake in both China M and Sharp Point.

China M is a Beijing-based wireless value-added service provider while Sharp Point is a mobile music platform service provider for China Mobile, the country's biggest wireless carrier.

Telstra had announced earlier in August it was hoping to generate A$1 billion of revenues from Chinese online and content business within the next five years. The stake purchases gave it a better position in the mobile data value chain in China. The Australian firm is expecting the two Chinese companies to generate A$1 million in revenue in 2009.

"Through the acquisition we can expand our position in the world's fastest growing online market and we will export mobile data service expertise to China," said Sol Trujilo, CEO of Telstra.

Justin Milne, managing director of Telstra Media, said Telstra is positioning itself for Chinese mobile phone users to shift from 2G to 3G (third generation) technology.

Telstra has been increasing its presence in the Chinese online market since 2006 when it invested US$254 million for 51 percent of Soufun Holdings Ltd.

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Telstra buys major stakes in 2 firms

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