Telstra said to have pumped $US100m into Chinese mobile VAS provider

Stuart Corner
Monday, 10 May 2010 23:38

IT Industry - Deals

The Interfax news agency says that Telstra has made a $US100m investment in Beijing-based wireless value-added services provider LMobile. If true, it would be the latest in a long line of Telstra investments in China.

Interfax said: "According to a report published on Web portal Sohu.com, LMobile's president and chief executive officer (CEO) Xu Maodong declined to disclose any financial details regarding the deal, other than that current LMobile management will retain majority stake in the company."

It added that LMobile had been established in 2008 and provides mobile news services for approximately 10 million users. The company also delivers multimedia mobile advertisements.

LMobile currently has five branches; in Shanghai, Guangzhou, Shenzhen, Zhejiang and Shandong, and a staff of 300.

Reports of Telstra buying into LMobile have been circulating for several months. Chinese media reports back in October 2009 said that Telstra would complete a takeover of LMobile or $US200m in November.

Then, on 29 March, Sina Tech reported that Telstra planned to pay $US200m for LMobile, over three years subject to a valuation adjustment mechanism.

"Telstra has valued Lmobile at approximately fifteen times its annual revenues," the report said. It claimed that "the two parties will hold a press conference in the next several days."

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