The international arm of Australia's dominant phone company, Telstra Corp, said it will look to buy e-commerce sites in China and build on its global communications network to bolster group earnings.
While its strategy is to buy phone and Internet companies in Asia, Telstra International will not do so "at any cost", and can look to drive growth by adding new services and products to its global communications network, said Tarek Robbiati, the head of the Hong-Kong based firm.
"The economies of Asia are, because of China, the real tractors of the world-wide economy. You can see that we are in the right place at the right time, and we have to be capitalising on those opportunities," Robbiati told Reuters in a telephone interview.
Investors see Telstra's international arm as a key source of growth for the group after it completes a deal to tip its assets into the Australian government's A$35 billion ($36.3 billion) National Broadband Network (NBN).
Having recently restructured its international communications network, the company will develop new products and services to differentiate Telstra from competitors. To lift its contribution to the group, Telstra International needs to acquire additional companies, "but not at all costs," Robbiati said.
"For China we are actively looking," Robbiati said, adding e-commerce remained the focus but declining to provide further details.
"But in China we have overheated valuations in the new media space. So it's not for lack of opportunities, it's for price that we haven't been very active."
In terms of regional phone providers, it was much less likely Telstra would add another company to its portfolio. "We are looking, but I can't see any obvious targets," Robbiati said, adding those that were available would need a large investment in management time to lift the business, which the company was not keen to invest at this point.
Telstra has agreed key terms with the government and is close to finalising an NBN deal which will see it earn about A$11 billion in long-term payments.
Telstra Corp has been struggling domestically, and has been investing heavily to streamline the company and win back market share from competitors such as Singapore Telecommunication's Optus. Telstra International offers global telecommunications services and manages subsidiaries such as Hong Kong-based mobile phone provider CSL New World and a number of Chinese web-based businesses.
It has annual revenues of about $1.4 billion, about a third of which is from CSL, and the bulk of the remainder is from the network business. It has previously invested in web-based services in China, including a 50 percent stake in SouFun, China's second largest online real estate firm, which it sold last year for a profit of around $179 million.
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