Australian telco completes Digicel’s $ 1.6 billion acquisition to keep it out of the hands of China

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Australian telecommunications giant Telstra will complete the purchase of Digicel Pacific, a leading Pacific mobile network provider, with federal support.

In October 2021, the former Morrison government began bidding to prevent potential Chinese suitors from controlling Digicel’s largest data network in the Pacific region.

Current Foreign Minister Penny Wong said the deal reflects Australia’s commitment to building a “stronger Pacific family” through investment in infrastructure.

‚ÄúTelecommunications and digital access are important for future sustainable economic growth and development outcomes,‚ÄĚ she said in a statement.

Andy Penn, CEO of Telstra, said the company will be a Telstra International brand.

“We are very pleased that the deal has been completed. We welcome Digicel Pacific to the Telstra family,” he said in an investor update.

Digicel Pacific is the largest mobile service provider to Vanuatu, Fiji, Samoa, Tonga, Nauru and Papua New Guinea (just north of Australia). It currently has approximately 1,700 employees and 2.8 million subscribers, generating approximately US $ 466 million in service revenue. ..

Under the agreement, the Australian Government will provide Telstra with a $ 1.33 billion loan through Australia’s export finance, which will add an additional $ 270 million (A $ 361 million). Telstra owns 100% of Digicel Pacific.

Acquisition is a purely strategic move

Rob Nichols, an associate professor of regulation and governance at the University of New South Wales, said the deal was a purely strategic endeavor as it had little business implications for Telstra.

“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 telephone companies are each managed by Singapore (Optus) or the United Kingdom. And is managed by a combination of Hong Kong interests (Vodafone), “he previously told the Era.

Geopolitical debates in the region have been in the last few months after signing a security agreement between the Solomon Islands and the Chinese Communist Party that could open the doors for troops, weapons and naval vessels stationed in the region. It is increasing rapidly. A few kilometers from the northern Australian city of Cairns.

In addition, Beijing’s Foreign Minister Wang Yi visited the region in May and signed a bilateral agreement with 10 Pacific countries.

The democratic government has urged us to assert influence in the region to drive Beijing out.

U.S. Vice President Kamala Harris sent peace troops to the area on July 12, establishing embassies in Kiribati and Tonga, appointing the first U.S. envoy to the forum, and rebuilding the U.S. International Development Agency. Announced to consider. The Pacific mission to deal with natural disasters and humanitarian aid.

Daniel Y. Ten

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Daniel Y. Teng is based in Sydney. He focuses on national politics, including federal politics, COVID-19 response, and relations between Australia and China. Do you have a hint? Contact him at [email protected].

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