ABS-CBN forays into telco business

MANILA, Philippines–Media giant ABS-CBN Corp. plans to launch its own telco brand that aims to give subscribers access to exclusive content on mobile devices, as part of plans to reach audiences that are slowly changing their viewing habits.

On Tuesday, ABS-CBN said its new “ABS-CBN Mobile” telecom brand, made possible through a network-sharing deal with Globe Telecom, would be launched before the year ends.

“This is effectively a new player in the telco industry,” ABS-CBN Corp. chair Eugenio Lopez III told reporters at a press conference. “(ABS-CBN Mobile) will just be like Smart (Communications) and Globe. Subscribers won’t even notice that it’s a deal with Globe,” he said.

Lopez was mum on the exact details of the commercial arrangements between the two firms, but he said ABS-CBN would be “buying capacity” from Globe. The amount the media firm pays the telco would depend on how much bandwidth is used.

“This is the natural evolution of the (media) industry. It’s what we think our consumers want,” Lopez said.

Once it’s launched, the ABS-CBN Mobile brand will have its own prepaid and post-paid services. The company will also bundle smartphones, Internet dongles, and tablet computers to its post-paid offers. Carlo Katigbak, head of ABS-CBN Mobile’s operator ABS-CBN Convergence, said rates for call, text, and data services would be at par with industry averages.

“ABS-CBN Mobile will be a sizeable player in the telco market,” Katigbak said. He said the ABS-CBN Convergence would spend about P2 billion to P3 billion over the next two years to build up its telco business. The deal with Globe is good for five years, which can be renewed at the end of the contract.

The Lopez family is no stranger to the telecom business. It currently owns Bayan Telecommmunications Inc. (Bayantel), which has its own nationwide phone network but is still a much smaller rival to major players like Globe and Philippine Long Distance Telephone Co (PLDT).

Ayala-led Globe also recently announced plans to acquire Bayantel from the Lopez group.

ABS-CBN Mobile is expected to help the media conglomerate compete with PLDT, which is owned by the same group that runs Associated Broadcasting Corp. (ABC), the operator of TV5.

Lopez said the company was not concerned about alienating other mobile phone users by making ABS-CBN’s mobile content exclusive to the firm’s phone subscribers. “(PLDT) has TV5… it’s very hard to be in the middle of both networks,” Lopez said.

He said the partnership with Globe—which is the first of its kind in the Philippines—would give ABS-CBN an important foothold in the mobile media sector. He said this would be important once digital TV services are launched by local media networks.

Users with digital TV-enabled devices will be able to receive free TV signals on their smartphones or tablets.