Pacific Century CyberWorks shares fell to a historic low yesterday after its strategic Australian partner Telstra assigned lower valuations to their two joint ventures. The Internet and telecommunications company saw its shares plummet 4.92 per cent to close at HK$1.74 after Telstra announced its annual results. The CyberWorks-Telstra joint ventures, both finalised in February, are the mobile phone alliance CSL and the Internet protocol tie-up Reach. For the year to June 30, Telstra made a A$999 million (about HK$4.11 billion) provision for CSL, although this was largely offset by the sale of its backbone assets to Reach which netted A$852 million. Meanwhile Telstra said yesterday that it had placed a fair value of US$1.3 billion on Reach after obtaining an independent valuation of the business as at January 31 this year. CyberWorks and Telstra placed a US$6.5 billion price tag on Reach when they formed the joint venture. Analysts said a lower valuation on Reach - now CyberWorks' second-largest asset after its dominant fixed-line business - would not only hurt CyberWorks' net asset value, but also dampen any spin-off plans. Concerns over whether CyberWorks might have to make provisions for the two unconsolidated joint ventures also helped push down its share price to a level not seen since the takeover of the former Cable & Wireless HKT. However, many analysts believed CyberWorks was unlikely to make such provisions in its interim results, to be announced next Thursday. '[CyberWorks] probably won't have to make provisions as the company carried these assets at book costs,' said Voon San Lai, an analyst at BNP Peregrine. 'However the valuation of Reach is now quite high relative to its previous perceived valuations.' Bertrand Chui, an analyst at Worldsec International, pointed out that CyberWorks had a book cost of only HK$6.3 billion on Reach and CSL, and hence it was unnecessary for it to make provisions even after adjusting to the same book cost as Telstra had. In its filing to the United States Securities Exchange Commission, CyberWorks said the net assets of its backbone business were worth HK$4.07 billion and its wireless business HK$5.28 billion. In February, CyberWorks sold 60 per cent of its mobile arm CSL to Telstra, and combined its backbone business with the Australian carrier to form the 50:50 Reach joint venture. Analysts said after subtracting Telstra's A$1 billion charges on CSL, the mobile company was now valued at about HK$14.37 billion. Earnings before interest, tax, depreciation and amortisation (ebitda) for CSL for the first five months was HK$558 million, according to Telstra. Subscriber numbers rose 8.14 per cent to 1.07 million in the first six months, with average revenue per user down 4.77 per cent to HK$419 per month. Ebitda for Reach was US$195 million. Telstra chief financial officer David Moffatt said he would expect the two joint ventures to be profitable this year.