Telstra is confident that a new IP backbone company, set up through its alliance with Pacific Century Cyberworks, can garner around US$500 million in earnings before tax.
Telstra says the initial public offering arising from its joint venture with Pacific Century CyberWorks probably will go to market by the middle of next year.
"We've agreed right from the beginning that these joint enterprises will be taken to the market quickly, and the order was the Internet Protocol [IP] backbone company would be first, some time in the next nine months or thereabouts, subject to market conditions," Telstra's chief executive, Ziggy Switkowski, told the Nine Network's Business Sunday program.
"The regional wireless company, the centre of which would be the Hong Kong Telecom wireless assets, would shortly thereafter follow, some time during calendar 2001."
Telstra and CyberWorks recently released the revised terms of an alliance to set up a 50/50 IP network joint venture and a mobile group, 60 percent owned by Telstra and 40 percent by CyberWorks.
The revised deal gave Telstra more control over CyberWorks' mobile assets and cut its cash commitment by AU$1 billion.
Mr Switkowski said he was confident of the value of the IP backbone company, adding that the venture would have annual revenues of about US$2 billion and earnings before interest, tax, depreciation and amortisation of about US$500 million. He said a valuation for IPO purposes of about US$6 billion was "within the range".
The float of the mobile joint venture would require more work than the IP backbone IPO, with the wireless IPO to contain more than just Hong Kong wireless assets.
"We have talked about a regional wireless company where the northern anchor is Hong Kong Telecom wireless, in the south is Telstra's MobileNet properties, and that we will kind of fill in the dots in the next year or so," Mr Switkowski said.
"Once that model is established and those assets are identified and in some cases actually put in place, then I think we have a structure, a very credible structure to take to the market."
He said he was puzzled by reports that Telstra and CyberWorks were close to announcing a new partnership with a United States company.
CyberWorks last week said it and Telstra were at an advanced stage of discussions with a third global partner about a US$10 billion infrastructure venture.
Speculation had centered on the addition of the US giant AT&T to the IP company.
