PLDT to infuse P4.5 B into Smart

Philippine Long Distance and Telephone Co. (PLDT) is infusing P4.5 billion into Smart Communications, Inc., the country’s biggest cellular telephone service provider.

In a disclosure to the Securities and Exchange Commission (SEC), Smart said it is issuing a total of 326,339,553 preferred shares out of the unissued portion of its authorized capital stock which would be subscribed to by PLDT.

In letter to the SEC’s Money Market Department, Smart said the shares would be issued to PLDT, which already owns 100 percent of Smart when the two telecommunications giant merged.

According to Smart, PLDT is subscribing to the issuance at P13 x .75 per share or an aggregate issue price of P4.527 billion, boosting its equity holdings in the company and making fresh capital available for the completion of its development projects.

Smart had started installing new GSM base station equipment that would substantially increase the capacity of its digital mobile phone network and also make it easier to install a third-generation (3G) system in the future.

The new equipment, called UltraSite, forms part of the $300-million GSM network expansion agreement signed last year between Smart and Finnish mobile phone manufacturer Nokia.

UltraSite base stations are about half the size of earlier equipment but can handle over twice the number of subscribers.

UltraSite base stations have the added advantage of being upgradeable to support the operations of the third-generation mobile phone system currently under development. This would facilitate the company’s move into 3G technology in the near future.

"We have been taking concrete steps in preparation for the next generation wireless technologies," said Napoleon L. Nazareno, Smart president and chief executive officer.

"Depending on the traffic load, UtraSite stations can carry anywhere from 10,000 to 20,000 subscribers versus 5,000 to 6,000 for the older models," said Rolando G. Peña, head of Smart's network services division.

According to Smart, 25 UltraSites have already been installed in Metro Manila, Cavite and Cabanatuan. The company said "hundreds more" would be set up to form the core of the company’s future network.

UltraSites would help Smart accomplish its P21-billion network expansion program for this year.