The Australian government and telecom giant Telstra are buying Digicel’s Pacific telecom arm in a $2.1 billion deal

Digicel Pacific employs almost two thousand people, and services a number of Pacific nations including Papua New Guinea, Fiji, Samoa, Vanuatu and Tahiti.

The future of the firm has been the focus of speculation for several months.

Last year, Digicel denied reports that it was in talks to sell its Pacific arm to state-owned China Mobile after running into serious financial trouble.

Telstra in a statement have called the deal a “unique and very attractive commercial opportunity to boost our presence in the region”.

Analysts, however, are calling the purchase a strategic move, with the Australian government ramping up its presence in the Pacific amid rising tensions with China.

The government has long held national security concerns over efforts by Chinese state-owned telecoms to assert authority in the Pacific.

Earlier this year, the Morrison government held private talks with the Biden administration about working together to stop China buying Digicel’s mobile phone networks in the Pacific and Caribbean.