[photopress:IT_Telstra_soufun.jpg,full,alignright]Telstra is Australia’s largest telephone company, is part owned by the government and has an American CEO who is, at the very least, to be seen as a contentious character. The government loves not Sol Trujillo who they think is rocking the boat. It was in desperate need of rocking.
Now Sol Trujillo is thinking of taking SouFun into an IPO. He said in Macau that it ‘is a very profitable business, and it is growing very fast.’
Telstra last year paid $254 million for a controlling stake in Beijing-based SouFun, China’s biggest online real estate broker.
SouFun plans to increase operations to around 75 to 100 Chinese cities as rising real estate demand drives up home prices.
Andrew Jobson, an analyst with Daiwa Institute of Research in Hong Kong said SouFun is attractive as ‘everybody is trying to get into China right now. SouFun has had a lot of growth.’
Sol Trujillo said Telstra may acquire other businesses in China to combine with SouFun before the IPO. The IPO may also fund plans for SouFun to expand its services beyond property and home-improvement listings.
Sales at SouFun rose 97% to (US$43 million) in the year ended June 30. The acquisition helped Sensis, Telstra’s advertising and directories unit, post an 8% increase in revenue.
Housing prices in 70 major Chinese cities jumped 8.9% in September from a year earlier, the biggest increase since records began in August 2005.
Note that Telstra has other committements in China. Telstra has inked a deal with China Netcom to carry high-definition images of the 2008 Beijing Olympic Games into Australia.
The telco will monitor international broadcast feeds using two fibreoptic cable links from China to Australia — one via Tokyo and another via Hong Kong. Telstra reports it will be the first Olympic Games to be shown in Australia in High Definition, requiring a major increase in data volume. Should sell a lot of High Definition sets as well.