Australian telecommunications company, Telstra, announced today it will acquire Digicel Pacific for US$1.6 billion, in partnership with the Australian Government.

Telstra will provide US$270 million in equity while the Australian Government will contribute US$1.33 billion through Export Finance Australia for the purchase.

According to Telstra, the deal will “boost” its presence in the region.

Digicel Pacific currently provides mobile and network services in Tonga, Papua New Guinea, Nauru, Samoa, Vanuatu, and Fiji.

Meanwhile, a statement released today by the Australian Government said Telstra’s acquisition sends an important signal about the company’s potential and about wider business confidence in the future of the Pacific region.

“The acquisition also reflects the Government’s commitment, as part of its Pacific Step Up, to support the development of secure and reliable infrastructure in the region, which is critical to the Pacific region’s economic growth and development.”

Digicel Founder and Chairman, Denis O’Brien said “I am very pleased that today’s agreement with Telstra, our very near neighbour in the Pacific, will further enhance DPL’s infrastructure, data and call termination links with one of the largest and most reliable networks in Australia.

"I thank all of our colleagues in the South Pacific and beyond who have made today possible and I remain committed to ensuring a successful transition in my ongoing role as a director of the newly formed holding company for DPL."

“From a Digicel perspective, today marks a very successful realisation of a strategic investment following our entry in the South Pacific in 2006,” he said.

Telstra plans to retain the same Digicel brand and the current Digicel Pacific management team will continue to lead the business.