Australian Government Blocks China with Pacific Telecom’s Acquisition of Telco

The Australian government could acquire Digicel’s mobile business in the South Pacific amid concerns that a Chinese-backed company could storm and establish a foothold for Beijing to expand its influence. There is a telecommunications giant Telstra backing.

On July 19, Telstra confirmed that the deal was underway, but was uncertain about the deal.

“Telstra was initially asked by the Australian Government to provide technical advice on Digicel Pacific, a commercially attractive asset and important for telecommunications in the region,” investors said.pdf).

“If Telstra were to proceed, it would be due to the government’s financial and strategic risk management support,” he continued.

Epoch Times Photo
The Telstra logo will appear as a pedestrian walking outside the Telstra Melbourne headquarters in Melbourne, Australia, June 14, 2017 (Michael Dodge / Getty Images).

“In addition to important government funding and support packages, investments need to be within certain financial parameters, and Telstra’s equity investments are a small part of the overall transaction.”

The federal government will probably fund most of the transactions.

Founded in 2006 by Irish entrepreneur Denis O’Brien, Digicel Pacific provides communications and mobile services in areas closest to Australia, including Papua New Guinea, Fiji, Naul, Samoa, Tonga and Vanuatu. .. The group generated US $ 235 million in 2020.

The sale to a Chinese telecommunications carrier has raised concerns that it may provide easy access to surveillance activities targeting Australian data and networks.

Rob Nichols, an associate professor of regulation and governance at the University of New South Wales, said this was a battle of influence between Beijing and its democratic allies.

“There is no sign that the Australian government has tried to bid on this opportunity. Part of the problem here is that the other two major Australian carriers are each managed by Singapore (Optus) or the United Kingdom. And is managed by a combination of Hong Kong interests (Vodafone), “he told The Epoch Times.

“If the asset is acquired by a Chinese telephone company, there is little technical risk. In fact, it is very unlikely that you will have access to the content of the submarine cable link,” he added.

Epoch Times Photo
The photo taken on June 20, 2011 shows the preserved feather-crowned Papua tribe of the Bird of Paradise holding a mobile phone at the Lake Sentani Festival in Jayapura, Papua, eastern Indonesia. Shows a woman. (Romeo Gacad / AFP via Getty Images)

“This issue is a far more influential issue. If a Chinese state-owned enterprise acquires Digicel’s assets, they could form the basis of political leverage.”

Nicholls also noted that the government needed to intervene and support bids for Telstra’s projects, indicating that Digicel’s acquisitions were not commercially stacked.

“This deal is driven solely by Australia’s desire for influence in the Pacific Islands region. Australia needs to be secured just north of Papua New Guinea,” he said.

The South Pacific region was the center of tug of war between democratic allies and Beijing. The Chinese Communist Party (CCP) has gained the support of Pacific Islands leaders using initiatives such as the Belt and Road Initiative, vaccine donations, and diplomatic influence.

Responses from Pacific countries have varied, with some accepting relations with Beijing and others rejecting it altogether.

In May, Samoa’s next Prime Minister, Fiame Naomi Mata’afa, vowed to abolish US $ 100 million in BRI port development near the capital. Her stance was a major change from Samoa’s incumbent leader, Tuira Epasai Relemari Elegaoi. He has maintained close ties with the Chinese Communist Party for most of his 20-year reign.

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