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Telecommunications giant Telstra announced on Monday that it has partnered with the Australian government to buy Digicel Pacific for $1.6 billion.

This is widely viewed as a political move to curtail China’s influence in the region, following interest shown by China’s biggest telecommunications operator to buy over Digicel Pacific.

The biggest mobile operator in the South Pacific region, Digicel Pacific has 1,700 employees and around 2.5 million subscribers from retail customers through to large enterprises. Digicel Pacific has operations in Papua New Guinea, Fiji, Samoa, Tahiti, and Vanuata – important markets in Papua New Guinea.

In a press release, Telstra stated that the Australian government will contribute $1.33 billion, while Telstra will contribute $270 million in equity. Telstra will own 100% of the ordinary equity and receive strategic risk management support from the government.

This move is also aligned to Telstra operations in Papua New Guinea, where Telstra has been a licensed operator since 2012 and one of the biggest providers of voice and data services connecting the South Pacific to the rest of the world.

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