Digicel Group denies report of Pacific unit sale to China Mobile

SYDNEY (Reuters) - Jamaica-based mobile phone carrier Digicel Group denied an Australian newspaper report on Thursday and said there is "no basis whatsoever" that it would sell its Pacific unit to state-owned China Mobile Ltd 0941.HK.

Earlier in the day, the Australian Financial Review had reported that the Chinese company has been conducting due diligence on Digicel’s Pacific unit since the beginning of the year, in a deal that could be worth as much as $900 million.

“We can categorically state there is no basis to this whatsoever and that no approach has been made to us,” Antonia Graham, head of communications for Digicel Group, said in an emailed statement.

In the Pacific, Digicel operates in Papua New Guinea, Fiji, Samoa, Vanuatu and Tahiti.

A sale of the Pacific’s largest mobile phone carrier to a Chinese state-owned company would be a cause of concern for the Australian government amid strategic competition between U.S. allies and China in the Pacific region.

Digicel, founded by Irish billionaire Denis O’Brien, has a dominant market share in PNG and will use the new Coral Sea submarine cable from Sydney that was constructed with funding from the Australian government to expand data services there.

Australia funded the 4,700-km (2,900-mile) Coral Sea cable to head off plans by Chinese telecoms company Huawei Technologies Co Ltd to lay the cable.

Reporting by Kirsty Needham, Editing by Sherry Jacob-Phillips