PLDT completes 1st stage of reorg, forms five new businesssegments

The Philippine Long Distance Co. (PLDT) group of companies has completed the first stage of its inter-corporate reorganization which gave birth to five business segments composed of fixed lines, wireless, Internet, satellite and new media as well as caused major movements of its key officials.

Beginning Jan. 1 this year, Pilipino Telephone Corp. (Piltel) president and chief executive officer (CEO) Napoleon Nazareno became the head of the newly created wireless business service which will oversee the activities of two PLDT subsidiaries -- Piltel and Smart Communications Inc.

Incidentally, Nazareno also officially takes over Smart's leadership on Jan. 16 after Orlando Vea was appointed board chairman of MediaQuest Holdings which PLDT formed recently specifically to handle media acquisitions such as Home Cable.

Antonio Samson, PLDT executive vice president for corporate affairs, likewise, moved to MediaQuest as its president.

Ramon Isberto, Smart spokesman, however, said that despite the reorganization, the PLDT group has no plans of laying off people.

"PLDT now is a much larger group. There are new businesses created. There are still positions to be filled up. So there will be no displacement, just a redeployment", he said.

For instance, he said, as in the case of Piltel and Smart, there is now a shift in focus, from the telephone rollout mode to operations and maintenance, thus, there are ongoing adjustments on the functions of the staff.

With Nazareno now at the helm of the two mobile phone firms, Isberto said the operational merger of both companies will finally be underway.

However, a legal merger cannot be done yet due to issues of franchise, among other technicalities.

The next step in the group's reorganization will follow after PLDT finalizes the acquisition of Smart by the second quarter of the year. Although PLDT stockholders already voted favorably on the move, approval of various government agencies still has to be secured.

"PLDT is building a different kind of company... different kinds of businesses. But as to how they will operate internally still has to be worked out," Isberto said.

Aside from wireless and new media, PLDT also has its fixed telephone line business which will also incorporate the landlines of Smart and Piltel; a satellite service involving Mabuhay Philippines Satellite Corp. (MPSC) and ACeS; and an Internet Service Provider, Infocom.

PLDT expects to realize annual savings of about $150 million from the synergy by the year 2002.

Such consolidation is seen to eliminate duplication of premises and staff, improve management and reduce costs as well as provide better network planning and economies of scale.

With the integration, PLDT is expected to lead in most of the telecom market segments.