Australian incumbent Telstra intends to use its war chest of up to A$5.1bn (US$4.5bn) to expand in Asia, according to CEO David Thodey.
The telco has high hopes of growing its business in Asia, Thodey was quoted in the Financial Times as saying, noting…
Australian incumbent Telstra intends to use its war chest of up to A$5.1bn (US$4.5bn) to expand in Asia, according to CEO David Thodey.
The telco has high hopes of growing its business in Asia, Thodey was quoted in the Financial Times as saying, noting that potential targets will need to meet its investment criteria.
Telstra reported revenues of A$26.3bn (US$23.2bn) for the year ended 30 June 2014, up 6% year-on-year, and free cash flow of A$5.1bn. The 2014 results were bolstered by the sale of its 76.4% stake in Hong Kong mobile operator CSL for A$2bn (US$1.8bn).
However, Thodey has reportedly downplayed the chances of the company making a large-scale acquisition in the near future.
Thodey cited the company’s joint venture deal with Telkom Indonesia, announced in January, as a model for future investments. Telstra will own 51% of the JV, which will provide telecoms services to enterprise customers, while Telkom Indonesia will hold the remaining 49%. The companies are aiming for the JV to launch operations early next year.
Meanwhile, local newspaper The Australian reported late last week that Telstra will set aside up to A$1bn (US$881m) for acquisitions, partnerships and infrastructure investments in the region.
Speaking at the company’s annual strategy day, CFO Andy Penn also reportedly ruled out a large-scale purchase, saying there are limited opportunities to buy existing incumbents at a good price.
However, he said the company is seeking bolt-on investment opportunities in infrastructure and consultancy services.
Telstra’s Asian strategy encompasses expanding its global enterprise services business, capitalising on the move to 4G and establishing consultancy services to help operators build data-focused networks, the report stated.
