Colin Packham and Paulina Dura

CANBERRA/SYDNEY – Telstra Corp Ltd (OTC) is closing in on a partnership deal with the Australian government to purchase the Pacific operations Digicel Group’s telecommunications company Digicel Group, according to two people familiar with the matter.

Telstra claimed in July that they were in negotiations to purchase the Pacific business. Australia would contribute most of the financing. It was widely believed this is a move by China to eliminate its influence over the region.

It’s quite likely. “I can’t set a date, but it is nearly done,” stated an Australian government source. Because they were not permitted to speak about the deal, these sources chose to remain anonymous.

Digicel was founded in Ireland by Denis O’Brien. It is currently the Pacific’s largest mobile phone operator with operations in Papua New Guinea and Fiji.

Nine Entertainment in Australia reported earlier that Telstra was expected to spend A$200 million-A$300 million, and A$1.5 Billion (1.1 Billion) from the government.

Telstra declined to comment. Andrew Penn, Telstra’s CEO, stated last month that investments would likely be restricted to “lower hundreds of millions”.

Digicel denied last year that it had been rumored in an Australian newspaper that it was looking at selling its Pacific business (NYSE:) Ltd.

The sale of Australian assets to China would cause concern given strategic competition between China and the U.S. in the Pacific.

Australia increased its Pacific presence through its creation of an A$2 billion (1.5 billion USD) infrastructure financing facility, and its membership in Quad group which includes Japan, India, and the United States. This was done to oppose China’s increasing interest in the Indo-Pacific.

($1 = 1.3545 Australian dollars)

($1 = 1.3528 Australian dollars)