Telstra CEO Andy Penn has insisted Telstra will only take a minority stake in Digicel Pacific, and that it would be a worthwhile asset for the company despite not initially having been in Telstra’s sights.
Speaking at the telco’s full-year results briefing, Penn said the Commonwealth would pay the bulk of the speculated $2 billion price tag for Digicel Pacific, an arm of Irish billionaire Denis O’Brien’s Caribbean-based Digicel empire and the largest owner and operator of 3G and 4G mobile infrastructure across Papua New Guinea, Fiji, Nauru, Samoa, Tonga and Vanuatu.
As reported in The Australian, Penn told investors that Telstra would own the regional telco “with appropriate risk protections” should the deal go through, and that Digicel would be consolidated into Telstra’s financial results; he also stressed that talks were incomplete, with the buyout in no way a done deal.
Andrew Penn, Telstra.
“Digicel Pacific is a commercially attractive asset, it enjoys a strong market position in the South Pacific region, it generated an EBITDA of $US235m in calendar 2020, with a strong margin, and it has an extensive telecommunications network.
“We will only proceed with a transaction if it is in the interests of our shareholders,” he said.
Penn also conceded that buying Digicel Pacific would not have been under consideration had the Government not raised it, a move believed to be a strategic ploy to keep Digicel and its infrastructure out of Chinese hands and one on which the official Commonwealth line has been “no comment”.
“There needs to be certain protection and financial support put in place, but ultimately we’re ‘Team Australia’ and if we can find a way to support and help the government, and matched to that also to be in the interests of shareholders – we have a very strong relationship and obviously many points of engagement and interdependency with the government – then we would do so,” said Penn.
Digicel was reported to have been offered $900 million by state-owned China Mobile for its Pacific division last year, though it has denied such an approach was ever made.
