New partner looms in SMC telecom project

San Miguel president Ramon S. Ang. INQUIRER FILE PHOTO / LEO M. SABANGAN II

AFTER the collapse of its alliance with Australian telecom giant Telstra, a new foreign partner has reemerged in the horizon for conglomerate San Miguel Corp.

Norway-based multinational telecommunications provider Telenor Group has expressed interest to team up with SMC, rekindling an interest originally communicated even before the talks with Telstra was pursued.

“They called me,” SMC president Ramon S. Ang told the Inquirer when asked about Telenor’s interest. Ang added, however, that he was still “thinking about it” and reiterated that it was also possible for SMC to pursue the long-planned telecom foray on its own.

Telenor, which has been operating for 160 years, is seen keen on entering the Philippine market as part of plans to expand its Asian footprint. Elsewhere in Asia, which contributed 51 percent of its revenues in the first quarter, Telenor has businesses in Malaysia, Thailand, India, Pakistan, Myanmar and Bangladesh.

Even before SMC entered discussions with Telstra, Ang had said that a number of foreign firms wanted to team up with SMC on the telecom venture, including Telenor. This was thus just a reaffirmation of Telenor’s interest to gain a foothold in the Philippines, one of the fastest-growing economies in the region.

As a result of its acquisition of a string of telecom companies with unused spectrum in previous years, SMC enjoys a monopoly of the much-coveted 700MHz spectrum, described as one of the highest quality wireless frequencies capable of travelling longer distances, requiring fewer cell towers and enjoying stronger indoor penetration. The group also has a portfolio of 800MHz, 1.8GHz and 2.3GHz spectrums alongside 1,800 base stations in key cities.

Philippine Long Distance Telephone Co. and Globe Telecom have a significant amount of high-frequency spectrums, challenging SMC’s ownership of the 700Mhz spectrum.

The potential launch of a new mobile phone service by a new player is seen rekindling a pricing war in the local telecommunication industry. Such heightened competition is seen to benefit consumers but curbs the profits of mobile phone operators.

Consumers have long complained about the very poor service of the Globe-PLDT duopoly in the local telecommunication sector and lawmakers have already conducted hearings to look into why Internet service in the Philippines was one of the slowest in the world.

For its part, SMC aspires to offer fast mobile broadband. Ang had said in earlier interviews that with a new player, Filipino consumers would benefit and other telecom players would be prompted to improve their services.

Outside of publicly listed Liberty Telecom Holdings Inc., SMC has other telecom interests through telecom holding unit Vega Telecoms Inc., namely Bell Telecommunications, Eastern Telecommunications and Express Telecommunications.