BayanTel, Digitel in talks with strategic foreign partners

Two prospective new players in the highly competitive cellular phone service industry are now in talks with possible strategic foreign partners to provide both financial and technical expertise to the endeavor.

Lopez-owned Bayan Telecommunications, Inc. (BayanTel) is now scouting for a strategic partner after the Supreme Court gave the company the go-signal to proceed with the use of its provisional authority to engage in the cellular mobile telephone service (CMTS) business.

Meanwhile, Gokongwei-owned Digital Telecommunications, Inc. (Digitel), which is scheduled to launch the commercial operations of its cellular business second quarter of this year, is still looking for a strategic partner.

These are currently five CMTS license holders. These are Globe Telecom, Smart Communications, Isla Communications, and Pilipino Telephone Inc. all of which are offering GSM or digital, while the fifth player, Extelcom, still offers analog technology.

BayanTel was supposed to be the sixth CMTS license holder but its provisional authority was questioned in court by Extelcom.

BayanTel had a memorandum of understanding with Norwegian firm Telenor which was supposed to be its strategic partner for the cellular business, but the court battle initiated by Extelcom to stop BayanTel from using its PA dragged on until the MOU lapsed.

Extelcom questioned the National Telecommunications Commission’s grant of a PA to BayanTel to engage in the CMTS business in May 2000 and was able to get a court injunction that prevented the latter from going into cellular operations for many years. It was only recently when the High Tribunal reversed the lower court ruling and allowed BayanTel to go into CMTS.

It was learned, however, that Extelcom has filed with the Supreme Court a motion for reconsideration as a last-ditch measure to stop BayanTel from going into the cellular business.

BayanTel chief finance officer Gary Olivar said that they have not closed their doors on Telenor. "We are merely exploring other alternatives in case Telenor is no longer interested," he said, even as he revealed that they are now eyeing at least one more.

Olivar refused to disclose the name of their new prospective strategic partner, saying that they are still in negotiations.

BayanTel has to ‘regroup’ itself in order to give more focus to the cellular business and prepare for its entry into the highly competitive cellular phone market."We have regrouped in the sense that there are more people involved. They have to double their efforts and step up with whatever plans we have for our cellular operation. The market is not yet saturated," Olivar explained.

There are, however, doubts whether BayanTel will have the funds to engage in the cellular business. Right now, the company is still asking its creditors for a restructuring of its debts, and so is its mother company, Benpres Holdings.

In fact, BayanTel has asked the NTC to give it more time to pay for the P10-million spectrum users fee being charged to cellular companies, saying that the agency has not yet issued a formal assignment of the 10 megahertz frequency in the 1,800 bandwidth.