SMC to launch mobile phone unit in 2014

LONDON—Conglomerate San Miguel Corp. hopes to launch by next year a mobile phone service that will complement but not folded into broadband Internet service provider Liberty Telecoms Holdings Inc.

In a chat during his visit during the maiden voyage of Philippine Airlines to London, Ang said the group was now building its network of cell sites around the country. The plan is to launch the wireless mobile service by 2014.

Ang said the mobile service would use the telecom frequencies acquired by SMC over the years. He noted that Liberty would focus on the broadband business under the Wi-Tribe brand.

“We hope to launch next year,” Ang said.

SMC’s prospective entry into the wireless phone business seeks to challenge the industry currently dominated by Smart Communications Inc., which consolidated control of the industry by merging with Gokongwei-led Digital Telecommunications Philippines Inc., operator of Sun Cellular. Smart controls about 70 percent of the industry while Ayala-led Globe Telecom accounts for the balance.

Ang said SMC’s entry into the telecommunication business had been delayed because of other acquisition opportunities that came along the way that were prioritized by the conglomerate, where he is now the single biggest controlling stockholder.

Despite the already high mobile phone penetration in the Philippines, SMC believes there is room for a formidable third player to come in and improve the quality of telco services in the country. Although the high capital outlays provide barriers to entry in the telecom business, SMC sees opportunity from the decline in the cost of rolling out new cell sites over the years.

But while the mobile phone platform will not be under Liberty, the telecom unit has started cleaning up the books of subsidiary Wi-Tribe Telecoms Inc. (WTI).

Liberty recently approved the conversion into equity of its P7.6 billion in advances to WTI. “This conversion is expected to address the capital deficiency of WTI, and bring its stockholders’ equity from negative to positive,” the company said.