Telstra partners Australian government to buy Digicel Pacific
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Telecommunications giant Telstra announced on Monday that it has partnered with the Australian government to buy Digicel Pacific for $1.6 billion.
This is widely viewed as a political move to curtail China’s influence in the region, following interest shown by China’s biggest telecommunications operator to buy over Digicel Pacific.
The biggest mobile operator in the South Pacific region, Digicel Pacific has 1,700 employees and around 2.5 million subscribers from retail customers through to large enterprises. Digicel Pacific has operations in Papua New Guinea, Fiji, Samoa, Tahiti, and Vanuata – important markets in Papua New Guinea.
In a press release, Telstra stated that the Australian government will contribute $1.33 billion, while Telstra will contribute $270 million in equity. Telstra will own 100% of the ordinary equity and receive strategic risk management support from the government.
This move is also aligned to Telstra operations in Papua New Guinea, where Telstra has been a licensed operator since 2012 and one of the biggest providers of voice and data services connecting the South Pacific to the rest of the world.
Questions & Answers
Q.What was the primary motivation behind Telstra's acquisition of Digicel Pacific?
What was the primary motivation behind Telstra's acquisition of Digicel Pacific?
The acquisition is widely seen as a political strategy to reduce China's influence in the South Pacific, especially given China's biggest telecommunications operator had previously shown interest in buying Digicel Pacific.
Q.How much financial contribution did the Australian government make to the purchase?
How much financial contribution did the Australian government make to the purchase?
The Australian government contributed the majority of the funding, providing $1.33 billion towards the total $1.6 billion acquisition cost. Telstra contributed the remaining $270 million.
Q.What is the scale of Digicel Pacific's operations and customer base?
What is the scale of Digicel Pacific's operations and customer base?
Digicel Pacific operates in Papua New Guinea, Fiji, Samoa, Tahiti, and Vanuata, employing 1,700 people. It serves approximately 2.5 million subscribers, ranging from retail customers to large enterprises.
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