TELSTRA TO BUY PACIFIC ARM OF TELECOMMUNICATIONS GIANT DIGICEL WITH CANBERRA’S SUPPORT AMID CHINA’S RISING INFLUENCE

Telstra and the Australian government have finalised a deal to buy and operate the largest telecommunications company in the Pacific, in a move largely seen as an effort to counter China’s influence in the region.
The $2.1 billion deal to acquire and run Digicel Pacific is being funded largely by the government, which will provide $1.9 billion toward the acquisition.
Telstra said it would contribute $360 million and own 100 per cent of the company’s ordinary equity.
The deal, which is expected to be completed within the next six months, is “consistent with Australia’s longstanding commitment to growing quality investment in regional infrastructure,” the Department of Foreign Affairs and Trade said in a statement.
Digicel, founded by Irish billionaire Denis O’Brien, is the largest mobile phone carrier in the Pacific with operations in Papua New Guinea, Fiji, Samoa, Vanuatu and Tahiti.
The company makes more than $300 million a year in profit.
The deal comes after several months of discussions between Telstra and the government over the strategic asset.
The talks followed reports that China Mobile, the biggest telecoms operator in China, had shown interest in buying the Pacific arm of telecommunications giant.
Telstra said it was initially approached by the Australian government to provide technical advice in relation to Digicel Pacific and subsequently considered acquiring the business with its financial and strategic risk management support.
Stopping Digicel Pacific from ending up in the hands of a Chinese company has been seen almost as strategically important as stopping Huawei from getting a hold in Australia’s 5G network.
That’s especially since Digicel Pacific uses a 4,700km undersea cable from Sydney that was largely funded by the Australian government in 2018 in an effort to prevent PNG and the Solomon Islands from contracting Huawei for the project.
SOURCE: ABC NEWS
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