The Australian telecommunications company said in a statement Hong-Kong-based business Reach, operated in a joint venture with PCCW subsidiary Hong Kong Telecom, would be subjected to "significant changes" to cope with the tactics of competitors "using unorthodox pricing strategies or operating from a restructured cost base after emerging from bankruptcy.
"Despite the difficult competitive situation, Reach continues to be cash-flow positive, but no longer at levels that support Telstra's carrying value".
The carrier announced the resignation of Reach chief executive officer, Alistair Grieve, to be replaced by the current president of Telstra International, Dick Simpson. The president's role is being changed to that of managing director, Asian business development, a post to be filled by the current managing director, corporate relations, Brian Pilbeam.
Telstra formed Reach with Hong Kong Telecom in 2000 by merging its global wholesale business with that of the Asian carrier.
The company is the region's largest international carrier of combined voice, private line and IP services.
Switkowski said "...the well known imbalance of oversupply relative to still strong,but much lower demand, creates an environment of excess capacity in which pricing disciplines break down".
He said Telstra would not contemplate further expansion of its international businesses until its existing investments achieved "appropriate rates of return".
