Telstra Flags $219 Million Impairment Hit to US Video Business

   By Robb M. Stewart 
 

MELBOURNE, Australia--Telstra Ltd. (TLS.AU) forecast a 273 million Australian dollars (US$219 million) impairment charge after writing down the carrying value of its U.S. video business Ooyala to zero.

The hit will be recognized in the telecommunications company's results for the six months through December.

Telstra bought an initial 9% stake in Ooyala in 2012 and increased that to a controlling 98% two years later as part of a broader strategy to provide solutions for broadcasters and other companies. However, about 18 months ago it said it had identified challenges to the business and a wider market that continues to change.

"This was a business that Telstra purchased when the market dynamics were very different," said Stephen Elop, Telstra's head of technology and innovation and chairman of Ooyala.

He added Telstra had been working to improve the performance of the business.

Telstra said it continues to see a future in the parts of Ooyala that offer a video player and a workflow management system, but it would seek to exit its advertising technology business.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

February 01, 2018 19:03 ET (00:03 GMT)

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