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Politics

Australia’s Telstra buys Pacific’s largest mobile company

Australian Telco Telstra has agreed to buy the largest Mobile Operator in the Pacific in a $2.2 Bn deal predominantly financed by the Australian government.

The purchase is seen as a last-ditch effort to prevent the company going to China’s state-owned telecommunications provider, China Mobile.

Digicel operates in Fiji, Samoa, Vanuatu, Tonga, Nauru and Papua New Guinea. It’s currently owned by Irish Billionaire Denis O'Brien though talks were underway to sell the business to China Telecom before the Australian government stepped in with $2 Billion in financing for the acquisition.

Digicel Pacific uses a 4,700km undersea cable from Sydney that was largely funded by the Australian government, Canberra officials were reportedly concerned Beijing access to the cable could threaten national security.

Officials were also worried about ongoing issues of censorship and surveillance on Chinese telecommunications hardware raised as recently as last month.

‘This is fundamentally in the interests of both Australia and our Pacific family,’ the Department of Foreign Affairs and Trade said in a statement.

The move comes amid escalating tensions between Beijing and Canberra.

Beijing has levied significant trade tariffs and embargoes against Australian exports including barley, livestock and coal amid vocal criticism from Canberra on the country’s treatment of its Uyghur Muslim minority, expansion into the South China Seas, and Taiwan independence.

The Digicel deal is expected to close in the next 6 months. Telstra CEO Andrew Penn says he is not looking to overhaul the existing Digicel business.

‘Obviously, as time goes by people will want more data.’

‘But no plans to change the brand, no plans to change the business model, no plans to change the team in any material way.’.