News
Filipino conglomerate reiterates commitment to launching mobile services.
Telstra and San Miguel Corporation (SMC) on Monday ended talks to form a mobile joint venture in the Philippines.
"Despite an enormous amount of effort and goodwill on all sides, we were simply unable to come to commercial arrangements that would have enabled us all to proceed," said Telstra CEO Andrew Penn, in a statement.
"While this opportunity is strategically attractive, and we have great respect for San Miguel Corporation and its president Mr Ang, it was obviously crucial that the commercial arrangements achieved the right risk-reward balance for all involved," he said.
Telstra revealed in August 2015 that it was holding talks with the Filipino conglomerate that may have led it to invest up to US$1 billion to establish a new joint venture.
SMC said it is considering other joint venture opportunities and still aims to launch mobile services "as scheduled," which is an odd statement to make given it was scheduled to launch mobile services via its BellTel unit in January.
"The discontinuation of talks between Telstra and conglomerate San Miguel Corporation will delay the entry of a formidable third telco into the Philippines’ market. This will support the credit strength of the incumbents – Philippine Long Distance Telephone Company (PLDT), and Globe Telecom – in the short term," said Fitch Ratings, in a research note.
Meanwhile, Telstra said it has offered to continue to provide consultancy services pertaining to network design and deployment.
The Australian incumbent also reiterated its commitment to Asia.
"Our investment decisions will be guided by our capital management framework. Investments remain an important part of our future to ensure sustainable growth in earnings and shareholder returns over time," Penn said.
