Australian telecommunications giant Telstra is prepared to pay nearly $US2billion to control a mobile phone network that operates throughout the South Pacific.
Telstra has partnered up with the Australian Government to take over the Digicel’s operations.
The offer of $US1.6 billion for the Pacific arm of the business could be extended by a further $US250 million subject to the financial performance over the next three years.
Australian taxpayers will fork out around $US1.1 billion ($A1.5 billion) of the equity for the initial sale price while leaving Telstra, a private company, to pay around 20 per cent to take ownership.
Media reports indicate that the Australian government’s decision to support Telstra was to unsettle interest from Chinese telecommunications companies and that country’s unwavering influence in the Pacific.
The business will be wholly owned and operated by Telstra and will be overseen by the Telstra-controlled board, which will also include current owner Denis O’Brien and two independent directors.
Nauru will be one of the biggest benefactors of the move since Digicel first provided the much-needed service to the tiny island nation of 11,000 people in 2009.
“Nauru was without a telecommunications provider for many years and Digicel’s presence brought internet and phone connectivity,” president Lionel Aingimea said, “linking government, businesses, Nauruans and foreigners to the rest of the world and opened up vast opportunities for business, research, education and telemedicine.”
Digicel’s Pacific arm of the business was founded in 2006 and operates in Papua New Guinea, Fiji, Samoa, Vanuatu and Tonga.