Canberra, Australia, Oct. 25 (U.S.): Australia’s Telco Telstra has partnered with the Australian government in a $1.6 billion deal to buy Digicel’s South Pacific operations in a deal that will prevent a major part of the region’s telecom infrastructure from falling into Chinese hands.
Telstra, the country’s largest telecommunications company, said in a statement Monday that it will contribute $270 million to the deal and will own 100% of the shares in Digicel Pacific.
Telstra CEO Andrew Penn said terms of the sale had been agreed and would expire in six months.
“Digicel Pacific is a commercially attractive and vital communications asset in the region,” Benn said.
Owned by Irish entrepreneur Denis O’Brien, Digicel is based in Bermuda and is headquartered in Jamaica. It operates in 33 markets around the world, according to the Associated Press (AP).
It is the leading mobile operator in Papua New Guinea, Tahiti, Tonga, Nauru, Samoa and Vanuatu. It is the second largest airline in Fiji after Vodafone.
Trade and Investment Minister Dan Tehan said in a statement that the partnership with Telstra, once a state-owned monopoly, is “in line with Australia’s longstanding commitment to increasing quality investment in regional infrastructure”.
Tehan said the deal also reflects Australia’s commitment to support the development of secure and reliable infrastructure in the region, which is critical to the region’s economic growth and development.
The United States and some other governments have sought to reduce the participation of Chinese telecom equipment makers in modernizing telecom networks, citing security concerns. In addition, trade and other relations between Australia and China have been strained by a host of issues in the past several years.
Damian Kingsbury, an expert on international politics at Deakin University, said Australia viewed the South Pacific as its “backyard” and did not want a Chinese company that owns Digicel’s operations in the region.
“There is a very high level of concern in the background about China’s movement in the Pacific and elsewhere,” Kingsbury said. “There is a desire to try to neutralize China’s moves in the region.”
RAE