Beneath the surface of Pacific digital infrastructure investments

Digital transformation in the Pacific relies on external partners. As Australia, the United States, Japan and China vie to finance strategic infrastructure such as undersea internet cables and telecommunications networks, the cyber domain is becoming as geopolitically contested as traditional domains of competition.

Strategic vulnerabilities and opportunities for influence lie in the building and control of the undersea infrastructure criss-crossing the Pacific region, including where connecting nodes and landing stations are placed and how the digital sector is governed. As technological ‘de-risking’ between China and the West progresses, trusted communications networks are becoming more valuable.

Australia has significantly increased investment in digital infrastructure across the Pacific Islands since 2010. With the United States and Japan, Australia has committed resources to projects like the $15 million Palau submarine cable and the East Micronesia cable linking the Federated States of Micronesia, Nauru and Kiribati.

In late 2023, Australia announced a joint project with the United States, Google and Australian digital infrastructure firm Vocus to deliver the AU$80 million South Pacific Connect initiative. This will link Fiji and French Polynesia to Australia and North America, with potential landing stations in other South Pacific countries. In August 2024, Fiji announced that Google will build a data centre in the country, along with four undersea cable connections.

Papua New Guinea (PNG) is pursuing digital opportunities with China. Off the back of an ICT cooperation agreement signed during Chinese Foreign Minister Wang Yi’s visit to Port Moresby in April 2024, PNG ICT Minister Timothy Masiu led a delegation to China in July 2024 to discuss its implementation. Masiu visited Chinese tech giant Huawei’s headquarters and other sites to explore how PNG could leverage China’s ‘smart city’ technology to manage urban centres and how China could support PNG’s digital government agenda.

PNG is a key area for geopolitical competition in the digital sector between Australia and China. Concerns over China Telecom’s interest in purchasing the Pacific’s largest telecommunications carrier, Digicel, prompted the Australian government to underwrite Telstra’s purchase of the network in 2021 — the largest single aid investment Australia had made in the region at the time.

Solomon Islands is also hotly contested. In 2018, Chinese firm Huawei’s deal to build an undersea cable connecting Solomon Islands to Australia sparked fears that it would provide a potential vector for China into Australia’s fibre optic infrastructure network. This drove swift action by Australia to underwrite an alternative Coral Sea Cable built by a trusted supplier, though the Chinese government refutes accusations that Huawei is a front for state espionage. Within Solomon Islands, both Australia and China are funding separate telecommunications tower rollouts to improve domestic connectivity.

Elon Musk’s Starlink, a low-earth orbit satellite-based internet service, introduces a new dynamic to the region’s digital connectivity landscape. Starlink could provide an alternative or complementary source of connectivity, particularly where it is not feasible or cost-effective to lay cables.

Starlink’s growing availability could also address the unevenness of internet affordability across the Pacific. While internet rates in PNG are among the highest in the world, countries like Fiji benefit from more competitive pricing due to better infrastructure and market conditions. Starlink could level the playing field by offering more affordable and consistent pricing across different Pacific Island nations, though its actual cost will determine its impact. Whether Starlink will be seen as a ‘trusted partner’ will depend on its long-term reliability, data privacy standards and how well it integrates with or competes against existing infrastructure.

One concern for Australia and its partners is that as China becomes more involved in digital infrastructure in the Pacific region, it may increase its influence over the governance of these assets and the information environment. China’s digital infrastructure investments typically come with associated ‘soft infrastructure’ — software platforms, operating systems and information space governance.

China’s severe government digital censorship, known as the ‘Great Firewall’, keeps out content challenging the Chinese Communist Party’s official line on human rights issues in Hong Kong, Tibet and Xinjiang, as well as hotspots like the Taiwan Strait and the South China Sea. Liberal democracies would not want to see this exported into the Pacific, particularly as some Pacific Island countries such as PNG are already trending towards increased censorship.

As external partners rush to bridge the digital divide, gaps are emerging in the region’s regulatory oversight, digital governance, tech policy, cybersecurity frameworks, online safety, data protection and affordability measures. High demand to reduce cyber vulnerabilities and build local capacity remain unmet.

Australia’s Cable Connectivity and Resilience Centre, announced in July 2024 and badged as a Quad initiative, aims to fill these critical knowledge, standards and capability gaps. The Centre intends to equip Pacific Island countries to protect their digital sovereignty, ensuring robust tech policies and online safety standards.

Pacific Island countries’ digital connectivity is increasingly becoming the front line in a broader struggle over influence, governance and technological control. The battle is not just over cables and infrastructure, but over the very ideas and principles dictating the digital and information sector. Pacific countries’ strategic choices — with whom they partner and to what ends — will shape the region’s digital landscape for years to come.