Hutchison Whampoa will sell 50 per cent of its Australian third-generation (3G) network to Telstra at cost, allowing the conglomerate to cut the financial drain from its loss-making business.
The deal, Hutchison's first sale of 3G assets, will see Australia's largest telephone company paying A$450 million (HK$2.46 billion) to effectively buy a 50 per cent stake in Hutchison 3G Australia (H3GA), a subsidiary of Hutchison Telecommunications (Australia).
Under the network-sharing agreement, the two parties will set up a 50-50 joint enterprise into which H3GA's radio-access network will be transferred.
Telstra will pay Hutchison the first of four instalments in November. Further terms of the deal, including the implementation timetable, were not disclosed.
Hutchison and Telstra will equally share the 3G network's capacity and future capital investment, estimated at A$160 million for the next three years.
Hutchison finance director Frank Sixt called the transaction a clear 'financial win for both parties'.