The Australian Government has approved a plan to sell the majority of its Australian-built broadband to China, and one of the largest players in the market.
Key points:Sky Broadband is the only major player in Australia’s major broadband market to have signed an agreement to acquire a majority stake in a Chinese broadband providerChina Telecom will acquire the majority stake of Sky Broadbets infrastructure, including fibre-to-the-node and fibre-coaxial (FCoC) connectionsChina Telecom CEO Li Keqiang said he is open to the possibility of an acquisition of the Australian broadband market, but would not discuss the terms of the transactionA deal would see Sky Broadbands infrastructure and network acquired by a Chinese company with a majority shareholdingIn the process, China Telecom would become Australia’s biggest telecommunications company and its biggest broadband provider, becoming the world’s fourth-largest internet service provider after Comcast and Time Warner Cable.
Under the proposed deal, Sky Broadbs infrastructure would be sold to Chinese company China Telecom, which will buy a controlling stake in the company.
China Telecom would then build its own infrastructure for the sale of its broadband to Australian customers, with the Australian Government retaining ownership of the fibre-based infrastructure.
Sky Broadbarts infrastructure would also be sold, with Australia retaining a controlling interest in the assets and future services.
The Australian Government’s proposed deal with China Telecom is one of a number of major infrastructure deals in the pipeline, including deals with Telstra and NBN Co.
China’s state-owned telecommunications company China National Petroleum Corp is also a potential buyer of Australian broadband assets, but has yet to confirm any deals for its own assets.
The announcement follows a $1.3 billion deal struck last year between China Telecom and the Federal Government to buy Sky Broadfets infrastructure and assets, including telecommunications infrastructure.
Earlier this month, China announced a deal to buy a majority of Sky’s assets in Australia.
In November, it also bought the majority share of Sky Communications’ network, including the network infrastructure, with a view to expanding its business in the country.
In January, it said it was acquiring an additional 2.4 million premises in Australia, which could see the number of premises available to Chinese customers increase from 3 million today to more than 4 million.
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