Telstra Buys Chinese Online Firms for A$302 Million

Telstra Corp., Australia’s largest telephone company, bought controlling stakes in two Chinese firms for a total of as much as A$302 million ($198 million), expanding in the world’s fastest-growing Internet market.

Telstra acquired 67 percent stakes in each of China M, a provider of mobile-content, and Sharp Point, which offers services for online music businesses, the Melbourne-based company said in an Australian stock exchange statement today.

Chief Executive Officer Sol Trujillo aims to expand in China as growth slows in Australia where the number of cell phones exceeds people. Telstra, which has targeted A$1 billion in sales from China by 2013, may make more acquisitions in the world’s most populous nation.

“Today’s acquisitions will make significant progress towards that aspiration,” Trujillo said on a conference call. “We’ll continue to look out for opportunities there.”

Sales from China M and Sharp Point in the year ending June 2009 are expected to be about A$100 million, Telstra said in the statement. The acquisitions will be funded using internal cash.

Telstra rose 0.3 percent to close at A$3.63 in Sydney, while the benchmark S&P/ASX 200 Index dropped 0.4 percent. Telstra bought control of another two Chinese Web companies in June 2008 and paid $254 million for a controlling stake in SouFun Holdings Ltd., China’s biggest property Web site, in 2006.