Australia’s biggest telecommunication company, Telstra Corp., is expected to infuse at least $1 billion in the Philippines through a joint venture with San Miguel Corp. (SMC)
Telstra in a disclosure to the Australian Stock Exchange said the company has allocated $1.5 billion for new business and mergers and acquisition (M&A) this year.
Warwich Bray, Telstra chief financial officer, was quoted as saying the amount includes “investments in our capital program and start up investment such as the investment in the Philippines where we (are to pursue that opportunity. “
A report by Australian Business Review dated Oct. 29, 2015 quoted Telstra chief Andy Penn as saying the company will spend up to $1 billion if it goes ahead with its plans to launch a new mobile phone venture with beer and food giant San Miguel in the Philippines.
SMC in August confirmed it was in talks with Telstra but no deal has been sealed.
Telstra is expected to challenge the duopoly in the Philippine telecom market that is dominated by local players PLDT and Globe Telecom.
As of press time, SMC did not give any comment.
Last July, SMC through its unit Vega Telecom Inc. bought the interest of Qatar Telecom in Liberty Telecom after it signed a definitive agreements to acquire the stakes of Qtel West Bay Holdings S.P.C., wi-tribe Asia Ltd. and White Dawn Solution Holdings in Liberty for P5.75 billion.
SMC plans to start the commercial rollout of its cellular mobile telecommunication services by early next year, consolidating its four telecom units.
Aside from Liberty which operate under brand name WiTribe , SMC also controls Express Telecommunications Inc (Extelcom), Eastern Telecommunications Philippines Inc (ETPI) and its subsidiaries Telecommunications Technologies Philippines Inc. (TTPI) and the Bell Telecom Inc.
The four telecom unit have enough frequency to compete with the existing two telecom operator.
Extelcom and Belltel have mobile phone frequency rights. Liberty has broadband frequency while ETPI and TTPI have landline and fiber optic licenses allowing SMC to offer almost the same services offered by Globe Telecom and Smart Communications.
Liberty Telecoms Inc. expected is to break even following its exit from corporate rehabilitation last May. The Makati regional trial court issued an order to stop the rehabilitation proceeding of Liberty, allowing it to exit early from corporate rehabilitation which was until December 2016.
The company currently has 500 base stations, more than enough to cover the target subscriber base. Its Wi-tribe brand has 50,000 subscribers to date.
Liberty revenue declined to P42.17 million in the January to March period from P78.38 million in the same period last year. Expenses declined to P280.94 million in the three-month period from P323.39 million last year.
source: Malaya
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