TELSTRA VENTURES IN HONG KONG HIT AUSTRALIAN BOTTOM LINE.

SYDNEY, Sept 1 Asia Pulse - Australia's largest telco, Telstra Corp Ltd (ASX:TLS), took a $A965 million ($US622.42 million) hit in the first half after writing down the value of its 50 per cent stake in cable joint venture Reach Ltd, a partnership with Pacific Century CyberWorks Ltd (PCCW), to zero.

And the company pointed largely to the onset of Severe Acute Respiratory Syndrome (SARS) for the 15.9 per cent reduction in the sales revenue of Hong Kong mobile operator CSL for the past financial year.

These two factors, especially the Reach writedown, contributed to Telstra posting an annual profit of of $3.4 billion for 2002/03, its lowest result for five years.

Telstra chief executive Ziggy Switkowski, who was last week reappointed to the post until the end of 2007, said today the company's footprint in Asia would be larger by the time he leaves.

In reappointing him, Telstra chairman Bob Mansfield indicated last week it was unlikely Dr Switkowski would stay on after his current contract expires.

"I think over time Telstra's footprint in Asia will be greater than it is today but it will be in areas where people see that it's demonstrably a value kind of a building exercise," Dr Switkowski told Channel Nine's Business Sunday.

"We have continued to have development teams all around Asia - looking into China, Vietnam, Indonesia, etc - but have imposed quite important and disciplined financial criteria on any of these ...