Jul 19, 2021

Telstra in talks to buy Digicel Pacific in Australian deal

Telstra
DigicelPacific
Telecommunications
Finance
2 min
Telstra is looking to purchase the Pacific operations of the telecommunications firm Digicel Group in partnership with the Australian government

Telstra has announced today that it is in talks with the Australian government as it looks to purchase the Pacific operations of the Jamaican telecommunications company, Digicel Group. The move is considered to be politically motivated in an attempt to block China’s influence in the region. 

According to Telstra, the majority of bids for Digicel would be financed by the Australian government. Digicel is currently the largest mobile phone carrier in the Pacific and has operations in Fiji, Papua New Guinea, Samoa, Tahiti, and Vanuatu. 

While no specific financial details were provided, Australian media has reported that, if secured, the deal would be worth about US$1.5bn (AU$2bn) with the Australian government paying around US$1.1bn (AU$1.5bn).

The media claims that equity will be split after debt and Telstra will acquire up to 30% of the company.

Chinese sale a “cause for concern” due to competition with U.S allies 

Selling Digicel to a Chinese company would be a “cause for concern” for the Australian government due to strategic competition between U.S allies and China in the Pacific region. Jonathan Pryke, Director, Pacific Islands Program at the Lowy Institute, a Sydney-based think tank, explained: "The Australian government is trying to achieve a few things at once. 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. 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”.

A deal would also mean that Digicel would underwrite its future revenue forecasts for the next three years, according to the Sydney Morning Herald. 

Undersea cables 

As a company with a large market share in Papua New Guinea, Digicel uses a submarine cable from Sydney constructed with funding from the Australian government to expand data services there.

Built in 2018, the 4,700-km (2,900-mile) Coral Sea cable was largely funded by the government to head off initial agreements between Papua New Guinea and the Solomon Islands for Chinese telecoms company Huawei to lay it. 

Australia, in partnership with the United States and Japan, is also financing an undersea optic fibre cable for Palau, while Nauru, a small country in Northeast Australia, is planning to construct an undersea cable to connect an Australian network. The country rejected a Chinese proposal to lay the cable.

 

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Jul 30, 2021

Virgin Media O2 plans fibre broadband upgrade for UK homes

VirginMediaO2
broadband
Technology
networks
2 min
Virgin Media O2 is planning to upgrade 14mn UK homes with full fibre broadband capabilities over the next seven years

Virgin Media O2 is planning to upgrade 14mn UK homes with full fibre broadband capabilities over the next seven years

Virgin Media O2 has today announced plans to install fibre-optic broadband across 14mn homes and businesses in the UK. The company, which was formed from a merger between Virgin Media and O2, says it is making the move in an attempt to compete with BT. 

With installation costs of around £100 per property, Virgin Media O2 will lay the ultrafast fibre technology alongside existing cables located in underground tunnels. The switch aims to have installed fibre capabilities in 14.3mn homes by 2028, expanding on the 1.2mn homes with current fibre broadband access.

Lutz Schuler, Chief Executive of Virgin Media O2, said the move will herald “the next evolution” of its network “ensuring we’re fiber-fit for the future.”

“Our mission is to upgrade the UK, and we are doing exactly that,” he said.

Fibre broadband installation to represent a “modest annual increase” for Virgin Media O2

The company has said that the work of installing fibre broadband across the UK will result in a “modest annual increase” in its current capital expenditure budget currently standing at £2bn (US$2.7bn) per year. 

The news follows the announcement that Virgin’s main competitor, BT Openreach, also intended to install fibre broadband, increasing its coverage to a further 551 towns and cities across the UK, as part of its £15bn programme to support 25mn properties. BT’s broadband rollout aims to provide the service to a total of 5mn homes and businesses. 

In a statement commenting on the rollout, Virgin Media O2 said: “Right now, we have the UK’s leading gigabit network, and this upgrade means we’ll be even stronger for the decades ahead, pursuing new opportunities and putting words into action.

“In 60 days since the formation of Virgin Media O2, we have achieved a lot, but this is just the beginning. With strong foundations for growth in place, we will boost connectivity, provide greater choice and be a challenger the country can count on.”

The firm added that “the existing cable network will continue to be maintained and developed while the extensive upgrade takes place.”

 

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