The Australian government and telecoms giant Telstra are buying a Pacific telecoms company in a joint venture.
The movie is being viewed as a political block to China’s influence in the region.
Telstra called the A$2.1 billion deal a “unique and very attractive commercial opportunity to boost our presence in the region”.
Digicel Pacific employs 1,700 people across Papua New Guinea, Fiji, Samoa, Vanuatu and Tahiti.
The company’s future has been the focus of speculation for months.
Last year Digicel denied a report that it was in talks to sell its Pacific arm to state-owned China Mobile.
According to Telstra, the Australian government approached it “to provide technical advice in relation to Digicel Pacific” which is “critical to telecommunications in the region”.
The government then agreed to finance the bulk of the bid, said Telstra.
Analysts say the company would otherwise be attractive to China as it seeks to assert greater authority in the region.
“Digicel is the primary player in the Pacific and Australia sees it as a strategic asset that they can’t allow to fall into the hands of China,” said Jonathan Pryke of the Low Institute.
“They are keen to get Australian business back into the Pacific and they’ve come to the realisation that they are going to have to underwrite.”
