SUVA: Digicel Pacific: Australia’s Telstra buys Pacific firm ‘to block China’

SUVA: The Australian government and
telecoms giant Telstra are buying a Pacific telecoms company in a joint
venture.

The move
is being viewed as a political block to China’s influence in the region.

Telstra
called the A$2.1bn ($1.6bn; £1.2bn) deal a “unique and very attractive
commercial opportunity to boost our presence in the region”.

Digicel
Pacific employs 1,700 people across Papua New Guinea, Fiji, Samoa, Vanuatu and
Tahiti.

The
company’s future has been the focus of speculation for months.

Last year
Digicel denied a report that it was in talks to sell its
Pacific arm to state-owned China Mobile.

According
to Telstra, the Australian government approached it “to provide technical
advice in relation to Digicel Pacific” which is “critical to
telecommunications in the region”.

The
government then agreed to finance the bulk of the bid, Telstra said.

Strategic move

Analysts
say the company would otherwise be attractive to China as it seeks to assert
greater authority in the region.

“Digicel
is the primary player in the Pacific and Australia sees it as a strategic asset
that they can’t allow to fall into the hands of China,” said Jonathan
Pryke of the Lowy Institute, a Sydney-based think tank.

“They
are keen to get Australian business back into the Pacific and they’ve come to
the realisation that they are going to 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.”

Media caption, Australia and
China are big trading partners but have disagreed on a number of important
political issues

Amid
escalating tensions with China, Australia has ramped up its presence in the
Pacific.

This
includes allocating $1.5bn to investment in infrastructure projects in the
region as well as joining the Quad group, with the US, India and Japan, and the
Aukus security pact, with the US and UK.

It also
largely funded a 4,700km (2,900-mile) Coral Sea cable in 2018 to prevent
Chinese telecoms company Huawei Technologies from laying it.

It is
also now helping to finance an undersea optic fibre cable for Palau.

Chinese
control of telecommunications networks has long been a concern for Washington
and its allies.

This has
led many countries to ban Huawei and other Chinese companies from supplying
phone lines and 5G networks, including the US, UK and Australia.