Carlos V. Tria, managing director for the Benpres group’s integrated broadband services (IBS) which include BayanTel, SkyCable and Sky Internet, confirmed that there are ongoing discussions with potential equity partners, which include the group of businessman Manuel Pangilinan which owns the Philippine Long Distance Telephone Co., Smart Communications, and Home Cable, among others.
The discussions focus around a possible merger of SkyCable, the biggest cable television operator in the country, with PLDT’s Home Cable, and one involving BayanTel and PLDT’s landline businesses.
Tria said the amount of equity that will be sold will depend on a lot on the equity partner. "In case it is PLDT, we can expect that we will still have a bigger share in SkyCable since we are number one in the business and a smaller share in the landline phone business. But that is just one possibility," he said.
He explained that the $500-million loan was basically used to put up BayanTel’s network and infrastructure. BayanTel started in 1996 and operates a landline business in Manila, Caloocan, Navotas, Quezon City, Malabon, Valenzuela, Bicol, Agusan, Davao, General Santos, plus 11 other new provincial areas in Visayas and Mindanao.
He said that while BayanTel’s earnings before income tax and depreciation (EBITD) has improved, its net income has suffered due to interest payments and the depreciation of the peso against the dollar.
BayanTel also has peso loans amounting to more than P2 billion. Most of the dollar-denominated and peso loans, Tria said, are long-term in nature and were incurred sometime in 1996, which means some of these have already fallen due and the company has to start paying the principal.
"Before the creditors start breathing down our necks, we have to work out the restructuring program," Tria emphasized.
BayanTel reported that it lost some 30,000 subscribers last year, bringing down its total subscriber base to 215,000, a decline of 12 percent from 1999 levels.
Tria, however explained that despite the reduction in subscriber base due to the weeding out of delinquent subscribers, EBITD grew because those who were left were those with higher usage and those who keep up with their payments.
He added that most telecommunications companies engaged in the landline business, with the exception of Digitel, saw a reduction in their subscriber base.
For 2001, BayanTel expects the bulk of the telecommunications industry growth to come from data services and the mobile phone business. It expects a ruling from the Court of Appeals in the next two weeks on the motion of reconsideration it filed. The CA last year nullified the provisional authority granted by the National Telecommunications Commission to BayanTel allowing it to offer cellular mobile telephone services.
Meanwhile, Elizabeth Locsin, IBS vice president for corporate and carrier management, announced a 27 percent growth in its data services business during the January to October 1999 period. BayanTel is focusing its business on data services this year.
Locsin said BayanTel is one of the two finalists for the Coca-Cola regional network outsourcing contract amounting to $15 million over the next five years.
She also revealed that on the domestic carrier side, BayanTel has sold to Globe Telecoms the right to use for a period of 25 years at a cost of P835 million ($20.88 million) its capacity in the national digital transmission network (NDTN) where BayanTel has 83 percent control. Globe paid the amount in cash, which helped prop up the domestic carrier business’ gross revenue by 85 percent and its net revenue by 78 percent last year or an increment of around P300 million.