Australia Government and Telstra Buy Digicel Pacific

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 AUSTRALIAN GOVERNMENT AND TELSTRA BUY DIGICEL PACIFIC TO COUNTER CHINA’S RAPID PUSH FOR A STRATEGIC FOOTHOLD IN THE PACIFIC

The Australia-China relationship has traditionally been dominated by global geopolitical and strategic concerns.

The relationship, however, deteriorated severely during 1996 and Australia's policies on China and the US were subjected to unusual and strident public criticism by the Chinese Government.


China’s rapid economic growth and push for a strategic foothold in the Pacific islands are being viewed by Australia as a security risk.

To counter the rapid advancement of China in the Pacific region, the Australian government, through Telstra, made the move to buy Digicel Pacific, a very strategic asset in the geopolitical tussle between China and Australia.

Digicel Pacific is the leading telecommunications operator in the South Pacific, providing mobile and network services in Papua New Guinea, Nauru, Samoa, Vanuatu, Tonga, and Fiji.

In a joint statement released by Dan Tehan, Minister for Trade, Tourism and Investment and Senator Zed Seselja, Minister for International Development and the Pacific, the Australian government has committed to providing a financing package through Export Finance Australia (EFA) of USD1.33bn to support Telstra’s acquisition, consistent with Australia’s longstanding commitment to growing quality investment in regional infrastructure

“This package will include debt and equity-like securities designed to secure the Government a long-term return on its financing according to the statement.

“Digicel Pacific has been a successful and growing telecommunications provider in the Pacific for the past 15 years. Telstra’s acquisition sends an important signal about the company’s potential and about wider business confidence in the future of the Pacific region. EFA is providing financing that enables Telstra to take this commercial opportunity and will bring valuable experience in managing financial and other risks.

“The acquisition also reflects the Government’s commitment, as part of its Pacific Step Up, to support the development of secure and reliable infrastructure in the region, which is critical to the Pacific region’s economic growth and development. It will help with the region’s COVID-19 recovery and will support resilience and stability. This is fundamentally in the interests of both Australia and our Pacific family.

“As a trusted telecommunications provider, Telstra has helped support the development of critical infrastructure and economic growth in Australia for over 100 years. It is also one of the biggest providers of voice and data services connecting the South Pacific to the rest of the world.

“Telstra is committed to ensuring Digicel Pacific provides quality and reliable services to the region, and to forging trusted relationships with Pacific governments”

Image Credit: Fijivillage

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