Bayan Telecommunications Inc., a debt-ridden telecommunication company that is being backed by Globe Telecom Inc., is expanding to Indonesia.
In a statement Bayan said it had sealed an exclusive data services agreement with PT Telekomunikasi Indonesia International, or Telin, which was planning to outsource these services. Telin is a unit of Indonesia’s largest telecommunications firm, the state-run PT Telekomunikasi Indonesia TbK.
The deal will allow Bayan to provide data services to customers in areas where Telin has presence, which include Indonesia, Singapore, Hong Kong, Timor Leste and Australia, according to the statement.
This development is expected to further heighten the rivalry between Globe and Philippine Long Distance Telephone Co.
Indonesia is the turf of the Salim family who controls First Pacific Co. Ltd., the single biggest shareholder of PLDT.
PLDT has teamed up with Indonesia’s second-biggest player, PT Indosat. The partnership with PT Indosat covers the provision of services to corporate clients in Indonesia. These include data services, an area where Bayan will directly compete with PLDT.
A PLDT official declined to comment on the partnership between Bayantel and Telin.
In the meantime, Bayan’s partnership with Telin will likely pave the way for other potential tie-ups, Patrick Gatchalian, Bayan business head, said in the statement.
“Other partnership opportunities include the establishment of bilateral capacity between Telin and Bayantel. Benefits include network efficiency and scalability, faster provisioning of data services, availability of capacity, and flexibility in pricing,” he said.
“We are targeting customers that run mission critical applications and are dependent on low latency,” he added.
The partnership with Telin presently involves only data services and Globe may be eyeing a separate tie-up for voice services with PT Telekomunikasi Indonesia, a source familiar with the matter said. Globe was unable to immediately reply when sought for comment.
The deal signals Bayan’s intention to continue expanding amid current discussions involving its takeover by Globe, a unit of Zobel-led Ayala Corp.
Globe currently owns most of Bayan’s debts and it is seeking to gain approval from the rehabilitation court to convert these to equity.
Globe intends to convert almost 70 percent of Bayan’s debt into equity, which would give it 57 percent to 58 percent of Bayantel’s expanded equity, Globe chief financial officer Albert Larrazabal said last month.
He added that Globe was in negotiations with the Lopez family for their remaining shares although no deal had been reached yet.