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Mon, Feb 12, 2007 - Page 10 News List

Telstra seeks entry into Chinese market

AFP , SYDNEY

Australia's biggest telecommunications company Telstra hinted yesterday at expanding its business in China but said future earnings were not dependent on the Asian powerhouse.

Chief executive Sol Trujillo said Telstra's ownership of Hong Kong-based mobile operator CSL could be considered as a platform for a move into China.

"We haven't made a big move in terms of China, but we do have a major presence in Hong Kong -- we have the largest wireless operator, CSL, in Hong Kong, which is, as we all know, kind of a gateway into mainland China," Trujillo told Sky News.

"As opportunities present themselves perhaps we would look at that [moving into China], but yes, if there's something that makes sense at the right time, we would look at it, but our business plan and business base is not dependent on any major moves into China," he said.

Trujillo said he expected Telstra, which has battled to overcome dwindling profits from its traditional revenue source of fixed line telephones, to change its revenue profile substantially in the next three years.

"By 2010 Telstra won't any longer be called just a telecoms business, it is going to be called a media comms business, which means our revenue profiles will change," he said.

"We'll have bigger broadband revenues, which are growing today at significant double digit rates, we will have significantly higher mobile services revenues," he said.

Trujillo said he expected earnings from traditional telephone services to drop from about one-third to 20 percent of revenues by 2010.

The chief executive also said that not all the company's income would be generated domestically.

"We have some offshore activities that may be material," he said.

Telstra will release its first-half results on Thursday.

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