Telestra negotiates to buy Digital Pacific in Australian government-backed bid

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Telestra negotiates to buy Digital Pacific in Australian government-backed bid

A man looks at his phone as he walks past the Telstra logo that adorns the phone booth in Sydney’s Central Business District (CBD). Reuters / David Gray / File photo

CANBERRA, July 19 (Reuters) – Telestra Corporation Limited (TLS.AX) on Monday held talks with the Australian government to buy the Pacific Pacific operations of telecommunications company Digicel Group, a move that China has taken. Is seen as a political bloc for Influence in the region.

Telstra said the government would provide most of the funding for any bid for digital based in Jamaica, which has the largest mobile phone carrier in the Pacific, Papua New Guinea, Fiji, Samoa, Vanuatu and Tahiti.

The future of digital has been at the center of market and media speculation for months. It denied an Australian newspaper last year that it was considering selling its Pacific business to state-owned China Mobile Limited (0941.HK).

The sale of digital to a Chinese company will be a source of concern for the Australian government during the strategic rivalry between US allies and China in the Pacific.

“The Australian government is trying to achieve something at the same time. Digital is a key player in the Pacific Ocean and Australia sees it as a strategic asset that they cannot allow to fall into the hands of China.” Pacific Island program at Sydney-based think tank, Lowe’s Institute.

“They want to bring Australian businesses back to the Pacific and they realize they have to write letters.”

A spokesman for Diesel declined to comment. Australian Pacific Minister Z. Selsja also declined to comment.

Australian Foreign Minister Maurice Pine and the Chinese embassy in Canberra did not respond to requests for comment.

Telstra said the Australian government was initially approached for “technical advice on the Digital Pacific, a commercially attractive asset and important for telecommunications in the region.”

“If Telstra is to proceed with any transaction, it will be with the government’s financial and strategic risk management support,” the company said in a statement.

Telstra did not provide financial details, but Australian media reported that the deal would cost around $ 2 billion (1.5 1.5 billion) with the Australian government paying about 1.5 1.5 billion.

Using details reported by the media, Goldman Sachs estimated that the value of a deal would be between A $ 1.9 billion and 2.5 2.5 billion, when the equity would be split after the loan, after which Telestra would increase it by 30%. Have seen the acquisition of.

According to the Sydney Morning Herald, the deal will require Diesel to put its future earnings forecast in writing for three years.

Undersea cables

Australia has partnered with the United States, India and Japan to counter China’s expanding interests by building a 2 billion ($ 1.5 billion) infrastructure financing and membership of the Quad Group. Has expanded its presence in Alcohol. In the Pacific Ocean

DGIL, founded by Irish billionaire Dennis O’Brien, has a strong market share in Papua New Guinea and uses a submarine cable from Sydney to expand data services there with funding from the Australian government. Was built for

Australia has advanced preliminary agreements with Chinese telecom company Huawei Technologies Co., Ltd. for Papua New Guinea and the Solomon Islands to fund 4,700 km (2,900 miles) of coral sea cable in 2018.

Australia, the United States and Japan are financing an underwater optic fiber cable for Palau, while sources told Reuters last month that Noro was in talks to build a submarine cable that would connect to the Australian Net. Will be able to connect to work. Earlier, Noro had rejected the Chinese proposal. Read more

Washington has pressured governments around the world to show off Huawei and other Chinese companies to stop supplying sensitive communications equipment, accusing the company of leaking data to the Chinese government on espionage charges, Beijing and Chinese. Telecos has denied the allegations.

($ 1 = 1.3510 Australian dollars)

Reporting by Colin Peckham in Canberra and Palina Durran in Sydney; Edited by Lincoln Invitation and Jane Wardell.

Our Standards: The Thomson Reuters Trust Principles.

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