Outgoing Telstra Corp chief executive Ziggy Switkowski leaves the company in July and business pundits are already speculating whether the Asian investments which helped lose him his job will outlast his tenure. Mr Switkowski was personally associated with two highly criticised Hong Kong investments - one in mobile operator CSL and the other in the Reach data venture with PCCW, which, at the most recent count, have cost the company about A$3 billion ($17.83 billion) since 2000 and have played a large part in the 40 per cent slide in the value of Telstra's shares. In 2000, Telstra was broadcasting its ambitions to derive as much as 25 per cent of its A$4 billion or so annual profit from Asia and, despite early write-downs - which should have set off the alarm bells - Mr Switkowski still told the company's 2001 annual general meeting that Reach and CSL positioned Telstra 'really well' for regional growth. At the meeting, Mr Switkowski was also bullish about a deal to 'explore business opportunities' with China's No2 mobile carrier, China Unicom - an alliance which has been quietly buried. Now, the major focus of Telstra's international business - rather unconvincingly renamed Telstra Asia - is to piggy-back on opportunities from the company's status as official technical adviser for the 2008 Olympics in Beijing. Any positive spin-offs from that are likely to be years in the making and are unlikely to diminish the harsh judgments on Mr Switkowski's Asian adventure. His vision of Telstra as more than a big Australian phone company foundered against the global telecommunications downturn that followed the 2000 tech-wreck. His choice of partner has also proved a problem. In 2000, few could have imagined there would be any downside to an alliance with the Li family but Richard Li Tzar-kai's PCCW has - to say the least - failed to fulfil expectations. In Australia, his high-risk plans to take over the Fairfax newspaper group and turn Telstra into a major media player also backfired, earning him the animosity of the board, which prompted his departure. Now, Telstra's agenda is narrowly and domestically focused as it faces an escalating battle with Singapore Telecommunications-owned Optus, which is continuing to attract customers, particularly in the mobile market. While Telstra limped along with little more than 2 per cent growth last year, growth at Optus was in the double digits. Unsurprisingly, long-suffering shareholders are being placated with a A$4.5 billion plan to return capital. 'Telstra has abandoned its growth ambitions and is paying out more than 100 per cent of its free cash-flow to shareholders,' Morgan Stanley said in a research note. With the government of Prime Minister John Howard set to use its emphatic electoral mandate to finally sell its controlling 50.1 per cent stake in a A$30 billion share sale, Telstra - under its new chief executive - will embark on a new phase of life as a completely privatised, public company. And with China Netcom reportedly set to take a 20 per cent stake in PCCW, Telstra's Asian retreat could be part of a major transformation in Hong Kong's telecommunications industry. Merrill Lynch analysts believe Telstra could sell CSL back to PCCW as part of its Asian exit. 'We feel a new chief could well look to exit Telstra's somewhat isolated Asian holdings,' a Merrill Lynch research report said. 'It is quite possible that PCCW, whose core fixed-line business is being eroded by fixed and mobile pressures, could look to re-acquire CSL from Telstra.' Telstra bought CSL for US$2.1 billion from PCCW, and then wrote its value down by A$1 billion in 2002, but the broking house believes the operation is worth barely half of its original sale price. Merrill does not expect PCCW would pay any more than US$1 billion for CSL today, crystallising a significant loss for Telstra. Reach, meanwhile, is going in the other direction and could soon be reduced to an ageing infrastructure asset for use solely by Telstra.