Philippine Long Distance Telephone Company (PLDT) and Globe Telecom are buying the remaining telecommunication assets of San Miguel Corporation (SMC), PLDT said in a statement on Monday, May 30.
“Brand new day for PH (Philippine) Internet. We now have access to additional frequencies including 700MHz. Smart can bring stronger Internet to all soon,” PLDT CEO Manny Pangilinan tweeted.
PLDT and Globe have been strongly lobbying for the distribution of SMC’s frequency in the past year to improve the country’s overall broadband and data service. The two companies will each acquire 50% equity interest of the P69.1-billion ($1.48-billion) telecommunication business of SMC.
SMC’s coveted frequency became a hot issue after it drummed up the possibility of an entrance of a third player in the industry, but later on delayed its plans after its supposed partnership with Australian firm Telstra Corporation Limited failed to push through early this year.
Still open for 3rd player
While the buyout would solidify the two telco companies’ duopoly in the industry, Pangilinan tweeted they are returning some frequencies to the government for the entry of a possible third player.
“We are returning certain frequencies to [the] government to ensure possible entry of a third telco player. Competition [is] good for our industry. No problem,” Pangilinan added.
In a disclosure to the Philippine Stock Exchange, PLDT said the company, together with Globe, will relinquish certain radio frequencies to the government through the National Telecommunications Commission (NTC) through Vega Telecom as part of the acquisition.
“These radio frequencies to be returned… together with radio frequencies already held by the NTC, to allow for a third-party operator to enter the market. The acquisition will thereby help the NTC and the Philippine government provide for a better utilization of available radio frequency spectrum for mobile services, which will benefit consumers more quickly,” the company added.
PLDT said the move would likely raise the company’s capital expenditure to $100 million for 2016 and 2017. It has announced early this year of its costly and “painful” transition to digital, posting a lower net income for 2016.
These developments also come days after incoming President Rodrigo Duterte warned the telecommunication industry players to “better shape up” or else he will be forced to open the field to foreign investors.
Elyssa Christine Lopez is Entrepreneur.com.ph's editorial assistant/writer. Follow her on Twitter @elyssalopz.
Photos from Philex Mining, San Miguel Corporation, and Globe Telecom