Telstra’s CEO Andy Penn says that a one-off $132 million ‘super tax’ introduced recently in Papua New Guinea won’t impact its $2.136 billion takeover of telco Digicel.

Digicel is the largest mobile carrier in the Pacific, operating across PNG, Samoa, Vanuata, Tahiti, and Fiji, with around 2.5 million subscribers. Telstra will provide A$356 million in equity, with the Australian government kicking in A$1.78 billion.

Penn told The Australian yesterday the sale will likely proceed by the end of the month, with the ‘super tax’ not a factor.

“There was legislation passed in December but not implemented because it was subject to consultation,” Penn said.

“We consulted with the PNG government, on the basis of how we were structuring our investment and the sort of capital we’d be investing. They made some changes to the levy and it’s basically now structured as it is from our point of view.

“We haven’t yet completed the acquisition, it’s still subject to regulatory approvals, and this is across six different countries so there’s still one or two regulatory approvals to come through.”

PNG Treasurer Ian Ling-Stuckey is sticking with the tax.

“It was known that some would not be happy with the tax. No one is happy with having to pay a new tax. The complaints are expected,” he said.

“Indeed, we are expecting more complaints and challenges, but that usually comes with a good economic reform process.

“Key regulatory steps for the sale have been completed including the clearance by the independent Consumer and Competition Commission, along with regulatory approval of the Bank of Papua New Guinea for the mobile banking parts of the operation.

“The final clearance from NICTA is expected shortly. This will then allow the sale to proceed, hopefully by the end of the month.

“We want a modern telecommunications sector in PNG, and the reforms of our government is allowing this to happen.”