HKT, formerly known as Hong Kong Telecom, is part of PCCW, with which Telstra partnered for many years in a joint venture called Reach.
Telstra owns 76.4% of CSL, with the remainder held by New World Development. HKT will acquire the entire business.
Telstra Chief Executive Officer David Thodey said Telstra had enjoyed considerable success in Hong Kong, but this was a great opportunity to maximise shareholder value. “CSL has been a strongly performing business, the compound annual revenue growth rate was 9.4% over the last three years and we have gained market share. We are proud of CSL’s achievements. It has established itself as a premium brand and strong player in the market, last year adding 425,000 mobile customers.
“But there are a number of dynamics in the Hong Kong mobiles market. Asia is a very diverse region, with each market in Asia having its own characteristics and opportunities, and we need to consider these individually as we look to maximise value for our shareholders.
“We want to leverage our domestic strengths to grow our global footprint. The team is focused on refining and enhancing our strategy across Asia and identifying further opportunities to build our capability in the region.”
As an example Thodey mentioned Autohome. Telstra recently increased its stake in the successful Chinese car site and successfully listed it on the NYSE. Telstra’s investment in Autohome is now valued at $US1.9billion.
“In the last 18 months Telstra has opened nine new points of presence internationally, entered into two new submarine cable investments, opened a new data centre in Singapore and boosted our data capabilities across three continents.
“We have seen significant growth in different parts of our business in Asia, including Autohome and Telstra Global, and our plans to grow our business in this region remain firmly in place,” Thodey said.
The sale of CSL is expected to generate a profit to Telstra of approximately $600 million.