PHILIPPINE telecom giants PLDT and Globe Telecom have reached an agreement with the country’s most diversified conglomerate San Miguel Corp. to buy out the latter’s telecommunications assets in a deal worth P69.1 billion, the three companies said in separate announcements on Monday.
The surprise development came after SMC and Australia’s Telstra Corp. ended talks on joint investment in a new mobile network in the Philippines.
In a disclosure to the Philippine Stock Exchange, PLDT said it would acquire 50 percent equity interest of the telecommunications business of SMC, with Globe acquiring the remaining 50 percent.
“The consideration for the acquisition of the SMC telecommunications business is P69.1 billion, which includes P52.08 billion for 100 percent equity interest in Vega Telecom Inc. and assumption of around P17.2 billion of liabilities,” PLDT said.
Vega Telecom own controlling interests in Bell Telecommunication Philippines Inc. (formerly Extelcom), and Tori Spectrum Telecommunication Inc. (formerly Wi-Tribe), and Hi-Frequency Telecommunication Inc.
The company said that the acquisition would provide significant benefits to PLDT, Smart, TNT and Sun Cellular customers, further improve internet and data services for the public, and speed up the country’s overall development efforts.
“This transaction offers a breakthrough opportunity, not only for the companies involved but also for the industry and the country,” said Manuel Pangilinan, PLDT Chief Executive Officer.
Pangilinan also said that the deal would now give the PLDT access to more radio frequencies, in particular the 700MHz.
SMC owns almost all of the 700 MHz spectrum (694 MHz to 790 MHz), previously assigned for analog television broadcasting before it was shifted for telecommunications use as TV migrated to digital.
SMC added its decision was contingent on the assurance from the two carriers that they will implement SMC’s mobile broadband project faster than otherwise would be the case in order to deliver better, affordable services to consumers and enable the next wave of network upgrades for the carriers.
“This is a sacrifice we have to make to finally unlock the full potential of our high-quality, mobile broadband spectrum faster and allow consumers access to its benefits through the combined resources, network and expertise of the two carriers,” SMC president and COO Ramon S. Ang said.
Both PLDT and Globe earlier made pronouncements that SMC’s spectrum is key to expanding their respective mobile broadband to various parts of the country and bringing down prices for end users.
In a separate statement, Globe Telecom said it would acquire 50 percent equity and outstanding capital stock in various companies owning and operating the telecommunications businesses including frequencies, licenses, and all other assets.
The agreed consideration of P26.4 billion for Globe Telecom’s 50 percent interests to be paid upon closing of the transaction,” the company said.
Globe said that the deal heeds the call of incoming administration for better mobile Internet services in the country, and would also involve returned frequencies to the government that would enable future players to enter the market.
“The transaction will enable Globe Telecom to provide enhanced mobile internet services at a lower cost, hence providing significant strategic benefits for consumers, the general public and shareholders of Globe Telecom,” the company said. JAMES KONSTANTIN GALVEZ