02 Jun PLDT, Globe, acquires SMC telco assets
Amid the growing clamor for faster Internet services, San Miguel Corporation (SMC) sold its telecommunications assets to industry giants, Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom for about P70 billion. Among the assets include the 700 megahertz spectrum, a type of low-band frequency which is more cost-efficient, has wider coverage, and penetrates indoor areas better, as well as physical assets like cell sites.
Negotiations between Globe and PLDT with SMC began after the failed entrance of SMC’s supposed partner, Australian firm, Telstra Corp. Ltd. Telstra backed out of the proposed partnership due to opposition from local and Australian rivals and skeptics.
SMC’s President and Chief Operating Officer Ramon Ang said that legal challenges forced them to make a hard decision of selling the assets, “[T]the reason [why we sold our broadband] was we think it is going to be a long drag in court proceedings, and that it would be a disservice to the consumers by holding on to that frequency and wait for the foreign technical partner,” he said. A foreign technical partner is a precondition for a loan necessary to raise the $2 billion debt component for a startup telecommunications venture.
According to IHS Global Insight senior director and Asia Pacific economist Rajiv Biswas, the deal still requires the approval of the Philippine Competition Commission.
With the transaction, PLDT and Globe are expected to improve and lower the cost of Internet in the Philippines.
Camus, Miguel. “SMC sells telco assets to PLDT, Globe.” Inquirer.Net. 30 May 2016. Web. 1 June 2016.
Jiao, Claire. “Globe, PLDT take over SMC’s telco assets.” CNNPhilippines.com. 31 May 2016. Web. 1 June 2016.
“PLDT-Globe-SMC deal still needs PCC approval.” abs-cbnnews.com. 31 May 2016. Web. 1 June 2016.
Valdez, Katrina. “SMC: Legal challenges forced telco asset sale.” TheManilaTimes.Net. 31 May 2016. Web. 1 June 2016.