HKT, a PCCW subsidiary, will pay $2.4 billion for Telstra’s CSL, which will give it a 31% share of Hong Kong’s mobile telecoms market and reduce the number of providers to four from five.
PCCW originally sold the division after TV, internet and telecoms groups suffered as a result of heavy debt and writedowns from the dotcom crash.
In one of the world’s most saturated mobile markets, PCCW owner Richard Li said the deal will help HKT secure long-term dividend growth.
Hong Kong has 16.7 million subscribers, equivalent to 2.3 phones per person, according to the Financial Times.
Alex Arena, HKT’s managing director said the acquisition would prove a big boost to its existing mobile business.
“It is very hard to organically grow a business and get scale economies in a market that’s so full,” he said.
Telstra said Asia remains an important part of its strategy, despite the sale, but added that it was the right time to divest the unit given its recent growth.
David Thodey, CEO at Telstra said: “CSL has been a strongly performing business; the compound annual revenue growth rate was 9.4% over the past three years and we have gained market share,” he said. “However, there are a number of dynamics in the Hong Kong mobiles market that mean this is the right opportunity for Telstra to maximise our return on this successful asset.”
