PLDT keen on telecom tie-up talks with SMC

The country’s biggest telecommunications player is also keen on a possible arrangement with conglomerate San Miguel Corp. to gain access to the latter’s powerful 700 megahertz frequency, which SMC will use to launch a rival telco service sometime this year.

Philippine Long Distance Telephone Co. (PLDT) chair and CEO Manuel V. Pangilinan said Tuesday he was ready to negotiate with San Miguel.

“We are always open,” Pangilinan said, clarifying that they have yet to approach SMC.

He spoke at the sidelines of PLDT’s first-quarter briefing for 2016, where PLDT said core profit sank 22.5 percent to P7.2 billion compared to the same period in 2015. PLDT’s reported net income fell 34 percent to P6.2 billion partly due to a P1.6-billion impairment charge from its investment in Germany’s Rocket Internet, whose share price has been declining.

Pangilinan’s statement followed that of Globe Telecom last March, saying it was open to partnering with SMC and might even acquire companies that hold the frequency assets, if these were for sale.

Both PLDT and Globe recently launched an aggressive public relations campaign urging the government to reallocate the 700 Mhz. They said this would help solve the poor quality of Internet services amid heavy criticism from consumers.

SMC holds almost all of the 700 Mhz spectrum, a low-band frequency ideal for covering large areas and penetrating walls, through its companies Wi-Tribe and High Frequency Telecommunications. Wi-Tribe is owned by publicly traded Liberty Telecoms Holdings Inc.

SMC president Ramon S. Ang said earlier he planned to launch a high-speed mobile Internet service that would be faster and more inexpensive than what was on offer by the Globe-PLDT duopoly. He also said PLDT and Globe did not need any additional frequency assets and that they only needed to fine tune their networks.

The statement underscored heightening competition in the telecommunications space, also one of the most lucrative sectors today.

Pangilinan said Tuesday that the core profit drop from January to March this year was in line with its full-year profit guidance of P28 billion, a fifth lower than core earnings posted in 2015.

He added that consolidated revenues for the period were up 1 percent to P42.8 billion while service revenues were flat at P40.6 billion.

The company said the digital shift continued to have an impact on its revenue mix.

Revenues from legacy businesses—cellular domestic voice, SMS, and international and national long distance (ILD/NLD)—dropped by P2.5 billion while its broadband, corporate data and data center revenues rose by P2.5 billion, or 22 percent. Excluding the impact from the ILD/NLD business, PLDT said service revenue would have gone up 3 percent to P36.2 billion.

Capital spending also ramped up in the first quarter to P14.6 billion, mainly to expand 3G and 4G network access. PLDT said this was more than four times the spending for the same period in 2015. PLDT keen on telecom tie-up talks with SMC