The news that the government is pushing Telstra to fork out $2 billion to buy the telco's operations in six Pacific nations in order to avoid a Chinese vendor doing so, was first reported by the Australian Financial Review.
The push — with Australia giving Telstra a loan of $1.5 billion for the purchase — is apparently meant to keep a player like China Mobile from acquiring Digicel, with the standard excuse of "Chinese spying" being advanced.
But given that all these Digicel networks in the Pacific run on gear from Huawei, the government appears to have forgotten that it advanced the same tired excuse — Chinese spying — to prevent the Chinese vendor from supplying gear for Australia's 5G networks.
In that case, why did Australia prevent Huawei from bidding for contracts for 5G networks in the country? How is the Huawei gear used by Digicel in any way different from what the company has supplied to Australia in the past? (And would have done so in the future too, for 5G, as well had it been allowed to do so.)
Predictably, no mention of this contradiction has been made by any of the Australian media that have reported the Digicel story.
If the Australian Government is expecting Telstra to not only buy these Digicel assets, but also replace the gear they use with either Ericsson (which Telstra uses) or Nokia equipment, then the cost would rise to multiples of that $2 billion figure.
As with all telecommunications gear, upgrading to 5G equipment would not be possible unless the 4G gear was first replaced.
This is not the first time that Australia has intervened in telecommunications deals in the Pacific. Back in 2017, Canberra pressured the Solomon Islands to withdraw from an undersea cable project after Huawei was awarded the contract to build the cable. The project was finally awarded to the Vocus Group, with Australia footing two-thirds of the bill, a sum of about $100 million.
Whether Telstra will be keen to be pushed into the sale, remains to be seen. Australia has been in talks with the US about the purchase of Digicel, with Washington said to be interested in buying the telco's assets in the Caribbean, also for the same reason of curbing alleged Chinese spying.