Australia's Telstra Corp. has agreed to sell its Hong Kong mobile phone business to a company controlled by billionaire Richard Li in a deal worth $2.4 billion that boosts the scion's share of the city's saturated mobile phone market.
Australia's biggest phone company said in a filing that it had agreed to sell its 76.4 percent stake in its CSL New World to HKT , a listed arm of Li's PCCW Ltd media conglomerate, for A$2 billion ($1.8 billion).
HKT will also buy the remaining stake in CSL held by Hong Kong-based New World Development Ltd., the property developer controlled by the family of billionaire Cheng Yu-tung,according to the filing.
The deal gives Telstra a cash war chest to pursue other assets as part of its Asia strategy, and strengthens Li's grip of the city's mobile phone market with the return of an asset he sold more than a decade ago. It also cuts the number of mobile carriers in the territory from five to four, easing competitive pressure.
The deal will give Li, the younger son of Asia's richest man, Li Ka-shing, about a third of the territory's mobile market, according to HKT.
Hong Kong has one of the highest mobile service subscription penetration rates in the world at 16.7 million subscribers, or about 2.3 per person, Hong Kong government figures show.
Smartphone penetration in the Asia-Pacific region is booming, according to Nielsen, with growth in a number of markets approaching saturation. The region has eclipsed penetration levels in the United States and many European nations, Nielsen said in a September report.
HKT is already Hong Kong's top telecoms company, which together with PCCW provides the city with its quadruple-play platform: fixed line, broadband internet, television and mobile. The deal to buy back CSL takes HKT from the smallest to the largest player in the Hong Kong mobile market by customers, according to Reuters Breakingviews.
Source: Reuters
