Telstra sells out of CSL

One thing we can say for certain about Telstra’s exit from CSL: that’s the last foreign-controlled telco we will see on Chinese soil.

Telstra’s 76% stake in CSL not only seemed an anomaly in Hong Kong, it seemed anomalous to Telstra. The business fell into its hands as part of the disastrous Reach JV back in 2001 as Richard Li threw assets overboard to stay afloat. 

Unlike Telenor or SingTel, Telstra never made any serious attempt to build offshore mobile business group. Now, on its umpteenth global strategy, it’s focusing on the enterprise/cloud/managed services market. CSL remains the odd man out.

The sale price of $2.43bn (A$2.73bn) is well down on the A$4 billion it paid back in the day, though it represents a A$600mn profit on the marked-down book value.

The other, more striking point in this is HKT’s offer to surrender all of its 3G spectrum in 2016. That includes its own 2x15MHz as well as that of CSL.

HKT says it can do that because it now has access to sub-1GHz frequencies, including 850 MHz and 900 MHz, as well as 1.8 GHz, 2.1 GHz and 2.6 GHz. Additionally, it says it will no longer have to pay the accompanying spectrum fees.

This comes hard on the heels of Ofca's unpopular (with operators at least) instruction that Hong Kong operators to surrender a third of their 3G spectrum for re-auction in 2016.

Whatever the reason, this generosity, surely a first in the history of mobile, does a favour both to Ofca and in particular China Mobile by ensuring a discount on the auction price. Happy Christmas to both of them.