Merger talks between Sky-Home, Destiny Cable collapse

Talks between SkyCable-Home Cable and Destiny Cable on a possible merger have collapsed due to continued differences in business valuation.

Destiny spokesperson Beda Mañalac said they have withdrawn from talks for a possible merger with Beyond Cable, the holding company of SkyCable and Home Cable.

Lopez-owned SkyCable and PLDT’s Home Cable have a combined market share of between 70 to 80 percent while Destiny accounts for between five to 10 percent.

Mañalac explained that "Destiny has had discussions with Beyond but no agreement was reached regarding certain critical financial issues."

While due diligence on both cable companies was completed as early as March of this year, he cited continued differences in business valuation as the foremost cause for disagreement. "We feel that joining the consortium of Beyond Cable at this time would not be beneficial to the long-term viability of Destiny Cable and likewise run contrary to the general interest of our subscribers as well as stockholders," Mañalac added.

Destiny Cable was invited by Beyond Cable to explore a possible business merger immediately after the major STAR channels ceased to air in Destiny late last year. The STAR Group refused to renew its contract with Destiny Cable for five of its major channels, namely ESPN, Star Sports, Star Movies, Star World and National Geographic Channel, for purely "commercial reasons." No other reason was provided by STAR.

The STAR Group’s unilateral decision not to renew its contract with Destiny without just cause created uproar among Destiny subscribers specifically since the signal of the channels mentioned were cut just before the NBA season was about to commence.

Destiny said in its statement that the National Telecommunications Commission (NTC) was bombarded by calls from concerned subscribers and various consumer interest groups demanding for action to be taken in response to STAR’s unexplained and arbitrary treatment of Destiny and the disadvantage caused to its subscribers.

As a result, the NTC recently presented initial draft guidelines or the implementing rules and regulations (IRR) meant to govern the conduct of how cable programmers/providers deal with local cable operators. Moreover, the guidelines are also meant to protect the general interest of the Filipino consumers and local cable operators, particularly smaller operators, against such arbitrary and discriminatory practices of cable programmers/providers.

An initial public hearing presided by NTC commissioner Armi Jane Borje and deputy commissioner Jorge Sarmiento was conducted at the NTC office last May 22. Representatives of both the Federation of International Cable TV Association of the Philippines (FICAP) and the Philippine Cable and TV Association (PCTA), two major cable operator industry organizations, were represented in the hearing. Foreign program providers were also present, including representatives of the Motion Picture Association of America (MPA) as well as the Cable and Satellite Broadcasting Association of Asia (CASBAA).