CANBERRA, AAP – Australian taxpayers could soon be on the hook for a Pacific telecommunications company to stop China from buying the assets.

But Prime Minister Scott Morrison has refused to guarantee the public won’t cop a financial whack.

He also declined to explain what strategic benefit the purchase would have.

Telstra is considering taking over Digicel Pacific in partnership with the Australian government.

The company is critical to delivering telecommunications throughout the region.

But Telstra has said it would only proceed with a transaction if given “financial and strategic risk management support” from the government.

“Any investment would also have to be within certain financial parameters with Telstra’s equity investment being the minor portion of the overall transaction,” the company said.

The prime minister was asked to explain the potential transaction and assure Australians they would not suffer a loss, but declined.

“They are market matters for companies – I will leave that to the managing director of Telstra – that is a matter between him and his shareholders,” Mr Morrison told reporters in Canberra on Wednesday.

“They have commercial objectives which they pursue and I wouldn’t expect them to be doing anything that wasn’t in their commercial interests.

“That is what shareholders look to. I am sure that is what they will do.”

Digicel Pacific was founded by Irish entrepreneur Denis O’Brien in 2006 and is a leading telecommunications provider in Papua New Guinea, Fiji, Nauru, Samoa, Tonga and Vanuatu.

It generated net earnings of $318 million in the 2020 calendar year, delivering strong margins and extensive network coverage.

The national security committee of federal cabinet has considered the potential implications of the company being sold to a Chinese entity.

Security experts fear the mobile phone networks could be used to spy on Australia’s nearest neighbours, access sensitive data and disrupt activities.

However, concerns have also been raised the company could be using the China threat to extract money from Australian taxpayers.