Australia and China interested in Digicel's politically sensitive assets [1]
Monday, December 28, 2020 - 13:07. Updated on Thursday, January 7, 2021 - 13:04.
Digicel, the largest mobile business in the western Pacific, owned by the Irish billionaire Denis O’Brien, “is being crawled over by buyers who see an opportunity to buy the key infrastructure, which is suffering from high debt levels and weak earnings because of the pandemic”, reported the Australian Financial Review on 18 December.
Digicel is a dominant mobile phone network operator in 33 countries including Australia, Papua New Guinea, Fiji, Tonga, Vanuatu and Samoa.
Several Chinese entities such as China Mobile, Huawei and ZTE are said to be considering buying the struggling Digicel Asia Pacific division. However, according to the Australian Financial Review, the Morrison government had considered ways it might prevent China from buying the politically sensitive assets, such as assisting buyout fund through subsidised loans or loan guarantees.
It reported that the Australian Coalition government had spent almost $100 million to fund two-thirds of a 4700-kilometre undersea cable from Australia to Papua New Guinea and the Solomon Islands, to stop Chinese technology company Huawei from gaining a foothold in the Pacific and potentially spying on the region,
Huawei was banned by Australia’s former Prime Minister Malcolm Turnbull from participating in Australia’s 5G network because of national security concerns.
Australia is also partnering with Japan and the United States to finance about $US30 million for an undersea fibre optic cable to the Republic of Palau, in the western Pacific Ocean.
It reported that the Morrison government has a $2 billion Australian Infrastructure Financing Facility related to its “Pacific Step-up” plan, to boost support for infrastructure development in Pacific countries – partly aimed at countering China’s creeping influence in the region.