UPDATE 1-Telstra takes write down in China, guidance unchanged

* Telstra to take $138 million writedown on China business

* Telstra says other Asian investments performing well (Adds details, background)

SYDNEY/WELLINGTON, Dec 23 (Reuters) - Telstra Corp , Australia’s dominant phone company, will take a write down of A$138 million ($138 million) as the result of a review of its Asian businesses, but its guidance remained unchanged.

The writedown affects its 67-percent owned Octave business in China, with Telstra saying its other Asian assets are performing well, and it noted it would book a gain of $65 million from the IPO of SouFun , China’s largest online real estate firm.

“Neither the SouFun gain nor the Octave impairment will affect guidance, which explicitly excluded asset impairments and proceeds from asset sales,” Telstra said in a statement.

Telstra acquired a 67 percent stake in Octave, which provides mobile content and services in China, for A$259 million in February last year.

The Octave writedown was blamed on regulatory rulings in China that were expected to constrain the wireless application protocol (WAP) market, which has caused a rethink of the company’s business plan, Telstra said.

The company has other investments in mobile and Internet in both Hong Kong and China, which it said were performing well.

Asia is a key growth market for Telstra, which is facing increasing pressure from domestic competitors as it seeks to finalise a deal with the Australian government for its fixed-line assets to form the basis of a National Broadband Network. [ID:nL3E6NL1T5]

In the year to June 2011 Telstra is expecting to see earnings before interest, tax, depreciation and amortisation (EBITDA) decline by high single digits as it invests heavily to arrest its declining market share and reshape the company to face the different environment.

Reporting by Narayanan Somasundaram and Adrian Bathgate; Editing by Michael Perry