Villars venturing into telecom business

The Villar family wants to provide fixed-line broadband across the country, which would mark its entry into the telecommunications sector now controlled by industry giants PLDT Inc. and Globe Telecom.

Manuel Paolo Villar, son of property tycoon and former Senator Manuel Villar Jr., said in an interview that the strategy would initially involve providing high-speed internet to the group’s residential communities under family-controlled Vista Land and Lifescapes Inc., which has a nationwide footprint.

Villar, who did not rule out entering the mobile business eventually, said they were “open to a foreign partner.”

“I know the administration wants more competition. They want to encourage more players. That’s us and others too,” he said.

The group will undertake the business through a company called Streamtech Systems Technologies Inc., which is seeking a congressional franchise to operate a telco service.

In line with this, a bill was filed last year seeking to allow Streamtech to “construct, install, establish, operate and maintain telecommunications systems in the Philippines for commercial purposes and in the public interest.”

Villar, who is CEO of Vista Land, said the priority was to provide internet services to their housing communities, spanning 100 cities and municipalities across 37 provinces. He said their telecommunications service would likely be profitable.

Vista Land said it was continuing to expand nationwide.

“We’ve been planning it for a while, our buyers want good internet service,” Villar said.

He said they could provide “last mile” internet links to their existing communities within two years. That means Vista Land would still have to rely on the telecom backbone of incumbent players.

That could change if the government proceeds with its P78-billion national broadband network plan, a hybrid “infostructure” project that allows telcos to lease state-owned assets to provide last mile connections to far flung areas.

“If the national government creates a backbone that is accessible by third-party players, that will be a game changer,” Villar said. “If there is a backbone that is competitive, you will see the price of internet go down a lot.”

A key challenge for a budding telecom player, especially one that plans to also build a nationwide mobile network, was the massive cost involved.

Sean Gowran, Ericsson country head and president of Philippines and Pacific Islands, said that for a new full-service player to catch up, capital spending would be about $10 billion over five years, with break-even seen in 25 to 30 years.