PLDT buys 10% of Rocket Internet
Philippine Long Distance Telephone Co. (PLDT) is investing 333 million euros (P19.6 billion) for a minority stake in a European e-commerce giant, which is behind popular online retail stores like Lazada and Zalora.
The deal would give PLDT, the country’s biggest telecommunications company, a 10-percent stake in Berlin, Germany-based Rocket Internet AG, PLDT officials said in a press briefing Thursday.
The transaction, which would make PLDT Rocket Internet’s third external investor, represented the company’s biggest investment to date in the Internet segment, which PLDT chair Manuel V. Pangilinan said was becoming an increasingly important area of focus.
Under their deal, PLDT and Rocket will jointly develop mobile and online payment technologies and services in emerging markets.
The partnership will leverage PLDT’s mobile payments and remittance platforms with Rocket’s global technology footprint to provide products and services for the “unbanked, uncarded and unconnected” population in emerging markets.
Rocket Internet, whose companies reach a network spanning 100 countries, pulled in over 700 million euros in revenues last year. Still, Pangilinan said he did not expect any significant impact in terms of PLDT’s bottomline given that Rocket Internet has yet to turn a profit since it was established in 2007.
“We don’t anticipate, from a P&L (profit and loss) perspective, for that to have any material impact on the financial position of PLDT,” Pangilinan told reporters. “It is a financial investment.”
PLDT’s mobile money system, through Smart E-money, would be the main beneficiary in the near term, said Smart chief wireless adviser Orlando Vea during the same press conference.
Smart’s mobile money system handled transactions valued at approximately 3.4 billion euros in 2013, double its figure in 2012. Vea said they were expecting a similar increase for this year.
“So with Rocket Internet, that can only grow faster,” Vea said yesterday.
Rocket provides a platform for creation and scaling of consumer Internet businesses outside the United States and China.
Rocket Internet’s presence in the region and the Philippines includes Lazada, an Internet retailer of consumer goods covering everything from smartphones to baby diapers, and Zalora, an online fashion retailer. The retailers compete with other websites by offering exclusive discounts to buyers.
