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

Denis O’Brien telco said to be close to a deal

Digicel is the largest mobile phone carrier in the Pacific with operations in Papua New Guinea, Fiji, Samoa, Vanuatu and Tahiti. Photograph: iStock

Digicel is the largest mobile phone carrier in the Pacific with operations in Papua New Guinea, Fiji, Samoa, Vanuatu and Tahiti. Photograph: iStock

 

Telstra Corp is close to completing a deal to buy the Pacific operations of Denis O’Brien’s Digicel in partnership with the Australian government, according to two sources familiar with the bid.

Telstra said in July it was in talks to buy the Pacific business in a deal that would mean Australia contributes the bulk of 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 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.

Australian broadcaster Nine Entertainment has previously reported that Telstra will spend between AUS$200 million (€128 million) and AUS$300 million of its money and the government will contribute AUS$1.5 billion Australian dollars.

Telstra outlay

A Telstra spokesperson declined to comment. Telstra 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 AUS$2 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. – Reuters