Telstra Corp Limited, today announced the finalization of its acquisition of Digicel Pacific endorsed by funding from the Australian government, after a tax dispute between Papua New Guinea (PNG) and Digicel threatened to hinder the sale proceeding.
In April, Digicel stated that it was considering legal options after PNG imposed a tax of nearly USD 100 million that the Jamaica-headquartered telecom firm said could affect the planned USD 1.6 billion sale of its Pacific operations to Telstra.
Telstra said that with respect to the Papua New Guinea (PNG) additional company tax, Digicel has planned to resolve the matter with the PNG tax authorities. Telstra is not part of this process, and the outcomes of this process are a matter for Digicel, the company added.
The Chief Executive Officer at Telstra, Andrew Penn said that Digicel would fall under the Telstra International segment but would operate as a stand-alone business. He further added that they were incredibly pleased that the deal is completed and welcomed Digicel Pacific to the Telstra family.
Mr. Penn further stated that they have been working closely with Pacific Governments on this acquisition and thanked them for their cooperation and support. Mr. Penn said that they look forward to continuing to collaborate with them as they operate Digicel Pacific and strengthen their relationship in the region.
Telstra in October 2021 had agreed to purchase the Pacific operations of Digicel, with the Australian government providing USD 1.33 billion and Telstra contributing USD 270 million.
Digicel, founded by Irish billionaire Denis O’Brien, is the largest mobile phone carrier in the Pacific, with about 2.8 million subscribers and operates in PNG, Fiji, Nauru, Tonga, Samoa, and Vanuatu-the most lucrative business being those in PNG. It employs 1700 staff and generated service revenue of USD 466 million in the year 2021 through March 31, 2022.
The Albanese government inherited the transaction from the former government and confirmed it had made USD 1.33 billion available through Export Finance Australia to Telstra to finance the purchase.
Telstra’s acquisition signifies a milestone in Australia’s economic engagement
The Minister for Foreign Affairs, Penny Wong stated that the Australian Government’s support on this transaction reflects their commitment to help them build a stronger Pacific family through investment in high-quality infrastructure. He further said that telecommunications and digital access are critical to sustainable economic growth and development outcomes in the future.
The Minister for International Development & The Pacific Pat Conroy, in Fiji for the Pacific Islands Forum, said the region requires finest telecommunication services to aid its economic recovery from COVID-19. Telstra would be able to bring its substantial experience in the telecommunications sector to build on Digicel Pacific’s strong record in support of economic development across the region, he said.
The Minister for Trade and Tourism, Senator Don Farrell said it was anticipated that the Australian government’s contribution would encourage further investment in the Pacific from Australian blue-chip companies.
About Telstra Corp Limited
Telstra is Australia’s leading technology and telecommunications firm. They offer an extensive range of services from programmable networks system and cloud solutions to enterprise and mobility collaboration tools.
In Australia, they have imparted 18.8 million retail mobile services, 3.8 million standalone data services and retail fixed bundles and 960,000 retail fixed standalone voice assistance.
Telstra believes that it is the people who give purpose to their technology. That is why their purpose is to build a connected future so everyone can thrive.
Digicel Group Limited
Digicel is a mobile telecommunications operator which commenced operations in 2001. It has a presence in thirty-three countries across the Caribbean, Central America, and Pacific Islands, serving more than eight million clients. The company offers mobile phone services to support both individual and corporate customers, which include wireless broadband, GPRS data services, prepaid roaming, rollover minutes, SMS to e-mail, and multimedia messaging. Digicel is incorporated in Bermuda and created in Jamaica. In 2015, the company completed the purchase of Bermuda Telephone Company (BTC), which was announced in January. The acquisition will permit Digicel to offer triple-play services on the island, merging BTC’s fixed voice and broadband with its own mobile contributions.