Even without Telstra, SMC vows to make mark in telecom industry

Conglomerate San Miguel Corp. (SMC) is poised to challenge incumbent telecommunications players this year with a cheaper and more powerful mobile Internet service, president Ramon  S. Ang said.

The move marks the entry of a third player in the fiercely competitive telco business here and will break the five-year duopoly of Philippine Long Distance Telephone Co. and Globe Telecom.

San Miguel’s move into telecommunications is the latest in its diversification from the food and drinks business, which began nearly a decade ago. It also comes at a time when PLDT and Globe, faced with explosive demand for Internet services driven by data-hungry smartphone users, have been dodging criticisms over slow and expensive broadband.

Ang said no deal has been signed yet with Telstra. Last year, Telstra CEO Andrew Penn said the company could invest about $1 billion in a possible Philippine telco venture with San Miguel.

In an interview with Inquirer late Wednesday, Ang said the conglomerate could launch its LTE high speed Internet service even without a partner.

“Nobody can stop this anymore,” Ang said. “When we launch, we expect to lure subscribers right away with better quality and cheaper Internet.”

Ang said the company was currently testing the service, which would be rolled out “very soon” or within 2016. “We won’t switch it on until it’s perfect,” he said.

A Telstra spokesperson said Thursday talks with San Miguel were still ongoing, adding that there was “no certainty they will conclude in a deal.”

San Miguel is targeting an area that has been a growing source of profits for telcos here—Internet services.

Since smartphones were introduced, and as their prevalence grew due to falling prices, demand moved to the mobile space while customers devoured content from videos to music and games on the go.

GSMA, a global association of mobile operators, said in its 2015 report mobile broadband connections would account for almost 70 percent of the worldwide base, up from 40 percent in 2014.

Both PLDT and Globe have earlier acknowledged the threat of a third player. Saddled by bureaucratic red tape limiting the expansion of their cell sites, both have ramped up public awareness and lobbying to secure part of San Miguel’s 700 Mhz spectrum, a low-band frequency good for covering large areas efficiently.

Ang said there was no need to give up its spectrum as PLDT and Globe controlled most of the low-band LTE frequencies. He said San Miguel’s entry would only result in better services across the industry.

“If there is a third player, they will have to invest,” Ang said. “All we want is once we switch on our service, they improve their quality so the consumer will win.”

Operators worldwide are spending record sums to support mobile broadband and the use of smartphones.

California-based Cisco said smartphones generate 37 times more data than feature phones while 4G versions generate three times the data traffic as 3G models. GSMA expects 4G networks to reach half the global population by 2017.