The Australian phone giant, former state-owned monopoly Telstra, and the Australian government have made a joint bid of $2 billion for Digicel Pacific’s operations. The Australian company and the Australian government have made a joint bid to acquire the Pacific islands business of Denis O’Brien’s telecoms group Digicel Pacific.
The founder of Digicel Pacific is Mr. Denis O’Brien. This company, founded in 2006, has a strong market position in the Pacific region. It is, at present, operating in over 30 countries across the Caribbean and the Pacific region, including Fiji, Samoa, Papua New Guinea and, Tonga.
Digicel has made its name as a catalyst of a telecommunications revolution. It built a solid reputation in the Caribbean and Central America before it made its presence felt in the Pacific with cheap and reliable prepaid mobile services in the mid-2000s. This company rapidly become a dominant player in the economies of 6 Pacific countries. It also became a pay-as-you-go TV operator and an internet provider.
The Australian company Telstra has reportedly requested Mr. Denis O’Brien to sit on the phone company’s board. Telstra wants future revenue forecasts to be underwritten for the next three years.
Digicel hired Citigroup last year to provide advice on a possible sale of the Pacific business. Digicel confirmed that it had received many takeover approaches from Chinese brands such as Huawei, China Mobile and, ZTE. The interest shown by Chinese companies led to concern among national security experts in Washington and Canberra. National security experts expressed fears that such an acquisition could enable Beijing to spy on Australia and its closest geographical neighbors.
The joint bid made by Telstra and the Australian government to Digicel could be the Australian government’s way of ensuring that the Chinese do not get a chance to do any telecoms espionage. The Australian government is working hard to ensure a China monopoly in the Pacific telco space does not happen. It is also investing a significant amount of money in new and creative ways to get Australian businesses back into the region.