Digicel Pacific: Australia’s Telstra buys Pacific company to ‘stop China’
The Australian government and telecom giant Telstra are acquiring Pacific Telecom in a joint venture.
The region is seen as a political impediment to Chinese influence.
Telstra called the $ 2.1bn ($ 1.6bn; 2 1.2bn) deal “a unique and very lucrative business opportunity to expand our presence in the region.”
Digicell Pacific employs 1,700 people in Papua New Guinea, Fiji, Samoa, Vanuatu and Tahiti.
The future of the company has been the focus of speculation for months.
According to Telstra, the Australian government has been approached “for technical advice in the context of Digicell Pacific” which is “critical for telecommunications in the region”.
The government then agreed to finance a large bid, Telstra said.
Analysts say the company would otherwise be attractive to China as it seeks to gain more authority in the region.
Jonathan Pryke of the Sydney-based think tank Lowe’s Institute said: “Digisel is a key player in the Pacific and Australia has a strategic asset that it cannot allow to fall into the hands of China.”
“They’re looking forward to bringing Australian businesses back to the Pacific and they understand they have to underwrite.”
A spokesman for Australia’s Department of Foreign Affairs and Trade told Newswire Reuters: “Partnering on infrastructure development is a key part of our Pacific step-up.”
Australia has increased its presence in the Pacific amid rising tensions with China.
These include allocating 1.5 1.5 billion for investment in infrastructure projects in the region, as well as joining the Quad Group with the US, India and Japan, and the Aux Security Agreement with the US and UK.
The Chinese telecom company Huawei Technologies funded 4,700km (2,900-miles) of coral sea cable in 2018 to prevent it from being installed.
It is now helping to finance the underwater optic fiber cable for Palau.
China’s control over telecommunications networks has long been a source of concern for Washington and its allies.
This has led many countries, including the US, UK and Australia, to ban Huawei and other Chinese companies from supplying phone lines and 5G networks.