Telstra and Australian government finalising bid for Digicel’s Pacific assets

business
Telstra And Australian Government Finalising Bid For Digicel’s Pacific Assets
Founder of Digicel Denis O'Brien. Digicel is the largest mobile phone carrier in the Pacific, with the most lucrative operations in Papua New Guinea. Photo: Fazry Ismail/AFP via Getty
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Tomas Doherty

Australian telecommunications firm Telstra is close to completing a deal to buy the Pacific operations of Digicel in partnership with the Australian government, two sources familiar with the bid told Reuters on Thursday.

Telstra said in July it was in talks to buy the Pacific business in a deal that would see Australia contribute the bulk of the funding – a plan widely viewed as a political move to block China's influence in the region.

“It is fairly imminent. I can't put a timetable on it but the deal is almost done,” said an Australian government source. The sources declined to be named as they are not authorised to talk about the deal.

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 most lucrative being those in Papua New Guinea.

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Australian broadcaster Nine Entertainment has previously reported that Telstra will spend between A$200 million and A$300 million of its money and the government will contribute A$1.5 billion (€960 million).

A Telstra spokesperson declined to comment. Telstra's chief executive Andrew Penn last month told investors that any outlay from the company would likely be limited to the “low hundreds of millions”.

Digicel last year denied an Australian newspaper report it was considering a sale of its Pacific business to state-owned China Mobile.

A sale to a Chinese company would be a cause of concern for the Australian government amid strategic competition between US allies and China in the Pacific region.

Australia has ramped up its presence in the Pacific through the creation of a A$2 billion (€1.28 billion) infrastructure financing facility and via its membership of the Quad group – which includes the United States, India and Japan – to counter China's expanding interests in the Indo-Pacific.

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