The Telstra Corporation Ltd (ASX: TLS) share price is trading 1.2% lower this morning after reports the company has been in talks with a private equity firm to expand overseas.
Telstra wants to connect with the world
Speculation is rife that Telstra is looking to expand its operations overseas. According to a report in The Sydney Morning Herald, Telstra has been in "advanced talks" with I Squared Capital and PCCW Global of Hong Kong to merge its international division with the company. The move is seen by some as clear intent of the former government entity's plans to expand outside of Australia. PCCW is a subsidiary of Hong Kong Telecom.
According to the report, Telstra and I Square are planning on launching a joint bid for PCCW to then run the company as a joint venture. The reporting only confirms talks were held between Telstra and I Square as late as February this year. It is not clear if the talks are still ongoing.
What else might be affecting the Telstra share price?
Last month, the company said it would be restructuring its operations into four entities. InfraCo Fixed would own and operate Telstra ducts, fibre, data centres, and exchanges. InfraCo Towers would own and operate its mobile tower assets and ServeCo would own the radio access network and spectrum assets. The first three assets would be held by a holding company owned by Telstra shareholders.
In the announcement, Telstra said its international business would become another subsidiary within the group. It will own and operate undersea cables as well as oversee overseas operations. The company also would be looking to sell off InfraCo sometime into the future.
The news at the time, unlike today, sent the Telstra share price flying.
Telstra share price snapshot
Over the last 12 months, the Telstra share price has increased a modest 8.9%. Only four days ago, the company's share price hit an 8-month high of $3.48. Pre-COVID, the company was trading around the $3.80 mark.
Telstra has a market capitalisation of $40.8 billion.
