News
Filipino conglomerate pulls out of telecoms following failed J.V. talks with Telstra.
San Miguel Corporation (SMC) has agreed to sell its telecom assets to Philippine incumbent PLDT and Globe Telecom for 52.85 billion pesos (€1.02 billion).
Under the deal, reached on Monday, PLDT and Globe will each take 50% stakes in Vega Telecom, Bow Arken Holdings, and Brightshare Holdings, the parent companies of SMC’s telco businesses, which include BellTel, Eastern Communications, Express Telecom, and Liberty Telecom Holdings.
These various companies between them hold spectrum in the 700 MHz, 850 MHz, 2.5 GHz, and 3.5 GHz bands.
"We entered into this transaction as a solution to harmonise the spectrum assets in the country and immediately unlock the benefits of the underutilised frequencies. Ultimately our goal is to provide our customers with a better experience on our mobile data and home broadband services progressively over the next 12 months," said Globe CEO Ernest Cu, in a statement on Monday.
"PLDT has an execution team in place already which will enable PLDT to integrate this acquisition rapidly into our current network and capex plans. It is fully our intention to improve Internet access and coverage nationwide on an accelerated basis," said Manuel Pangilinan, CEO of PLDT, in a separate statement.
The deal was struck months after SMC ended talks with Telstra to form a mobile joint venture in the Philippines that would compete with Globe and PLDT’s mobile unit Smart Communications. The two companies had been in talks since August 2015.
Under the terms of Monday’s agreement, Globe and PLDT have agreed to initially pay 50% of the purchase price, followed by a second instalment equal to 25% on 1 December 2016. The final 25% is due on 30 May 2017.
Globe and PLDT will also assume liabilities of PHP17.15 billion.
