The buyout offer has regional security overtones, with the federal government reportedly concerned that the asset could be bought by Chinese interests if an Australian offer is not forthcoming.
A similar situation arose in 2018 when Australia offered to fund subsea internet cables in the region, again to stop Chinese companies from funding the projects.
Telstra said in a market filing on Monday that it is in “discussions regarding a potential transaction to acquire telecommunications company Digicel Pacific in the South Pacific region in partnership with the Australian Government.”
“The discussions are incomplete and there is no certainty that a transaction will proceed,” it said.
Telstra confirmed that any equity investment it made would be a “minor portion of the overall transaction”, which confirms the government will foot most of the bill.