PRESS DIGEST-Australian Business News - March 9

Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.

THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

Telecommunications giant Telstra (TLS.AX) is likely to continue to see its lucrative fixed-line revenues eroded according to analysts. The Australian Communications and Media Authority reports that young home-leavers are not installing fixed phone lines, instead they are opting for mobile phones or internet access for calls. In addition, the Federal Government's initiative to build a national broadband network, which is expected to replace the majority of Telstra's copper-based network, will most likely be operated by another company. Page 13.

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The development of Western Australia's (WA) iron ore is set to receive a boost with the approval of a new deep-water port at Oakajee, in the state's mid-west region. WA Premier Colin Barnett has indicated the state will pay up to half of the A$678 million required to build the facility on the basis the Federal Government provides the remaining funds. Joint venture partners Mitsubishi and Perth-based Murchison Metals won the tender to build the port, and full approval is expected within three weeks for the project to proceed. Page 13.

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The future of the proposed merger between drug manufacturer Progen Pharmaceuticals (PGL.AX) and biotechnology company Avexa is in doubt, with rival Cytopia trying to block this week's shareholder vote. Cytopia, which had previously courted Progen, has promised a A$1.10 a share buyback of any unspent funds Progen had raised to develop its liver cancer product PI-88. Cytopia has also called a shareholder meeting on March 27 for its proposal to be considered. Page 16.

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Adelaide based oil and gas producer Santos (STO.AX), may consider taking on partners to reduce risk in developing its two 100 percent owned Bay of Bengal deep-water sites off India's east coast. Managing director David Knox declined to comment on whether a process was under way to sell stakes, but he confirmed the importance of the sites to his company last month, saying "these assets are the anchor of our Indian portfolio." In February, Santos said it planned to spend A$70 million over 8 years on exploration in India. Page 16.

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THE AUSTRALIAN (www.theaustralian.news.com.au)

Australia's biggest franchiser of video stores has warned up to 200 video and DVD stores may close this year due to the impact of the global downturn. Franchise Entertainment Group, owned by founder Paul Uniacke, runs approximately 800 Video Ezy and Blockbuster stores that control about 65 percent of the home video rental market and 15 percent of retail movie sales. "Just look around your local high street, how many DVD rental shops have closed in the past few months," Mr Uniacke said. Page 19.

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Melbourne-based explorer Jervois Mining (JRV.AX) will hold an extraordinary general meeting on April 2 at which shareholders will decide whether to overturn the board and sack the company's managing director. A group of concerned investors, which includes board member Richard Campbell, calling itself Jervois-vision2009 launched the drive against the company's existing management team after it failed to finalise a funding deal last year with China Railway Group. If the rebels are successful they will install mining entrepreneur Norm Seckold as executive chairman. Page 19.

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Australian beer sales volume has increased for the first time in 15 years, according to financial services company Citigroup. A major factor in the result is believed to be last year's tax hike on pre-mixed spirits which resulted in the shelf price rise of A$1 a can of ready-to-drink (RTD) products. Citigroup analyst Craig Woolford says that while most RTD drinkers seem to have begun mixing their own drinks since the tax increase, some drinkers have made the switch to beer. Page 20.