Telstra approaches Digicel Pacific

Telstra is looking for new revenue streams and growth via acquisition. There has been rumblings about Digicel’s future by investors and the media for some time. News released today confirmed that Telstra is looking into acquiring the Pacific unit of Digicel. The acquisition would be made with the support of the Australian Government and is seen as a strategic move to combat the growth of China in the region. Digicel Group is the largest mobile phone carrier in the Pacific region.
The Australian Securities and Exchange received a letter from Telstra this week indicating that they were in discussions with Digical about a potential acquisition however talks were still in progress and there is at this stage, no deal has been agreed. Telstra was approached by the Australian Government provide some technical expertise regarding Digicel Pacific and if Telstra were to proceed with the acquisition of Digicel, it would be with financial and strategic risk management support from the Australian Government.
The pacific region currently has very poor mobile service and limited coverage estimated at 35 per cent of the population of the Pacific Islands having internet access. Many residents are hoping that the company is sold and that it will bring better services to more of the population. Digicel Pacific has a large market share in the region, controlling 91 per cent of the phone and broadbrand services in Papua New Guinea, and a majority in other areas such as Vanuatu, Samoa, Tonga and Nauru.
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