PLDT in talks with top US satellite TV operator

After selling its cable TV business to the Lopezes, telecommunications giant Philippine Long Distance Telephone Co. (PLDT) is now in serious discussions with America’s biggest direct-to-home (DTH) satellite TV operator Echostar Communiations to set up a "pervasive and cost-effective" satellite pay tv service in the Philippines on a joint venture basis.

Echostar chairman and CEO Charles Ergen and other senior executives met with key PLDT officials in Manila this week to explore the possibility entering into a joint venture to offer DTH service in the Philippines.

PLDT earlier sold the assets of Home Cable, its cable TV business, to the Lopezes in return for shares in Sky Cable (Central CATV). As a result of this, the Lopez group owns 66.67 percent of Sky and the PLDT group, 33.37 percent.

This is not the first time that PLDT wanted to go into the DTH business. Even before businessman TV company Dream Broadcasting, then PLDT president Manuel Pangilinan was already toying with the possibility of introducing DTH in the Philippines.

Together with putting up a DTH company, Pangilinan also wanted at that time to acquire a majority stake in GMA Network to complete with convergence strategy. However, due to concerns raised by PLDT creditors regarding maturing debts and the company’s ability to meet them, PLDT had to pull out of its deal with GMA and set aside the DTH plans.

There have been rumors in the past that Cojuangco and Echostar could have been partners in Dream but the talks fizzled.

There are reports that PLDT and Echostar have invited Cojuangco, PLDT director and former chairman (now chairman of ABC 5), to fold in Dream into the new venture. Unless Cojuangco decides to accept the invitation to join the PLDT-Echostar venture, Dream Broadcasting will have to compete head-on with this obviously stronger competitor, observers noted.

Ergen also discussed with PLDT officials the possibility of expanding their call center business relationship.

PLDT subsidiary ePLDT through the latter’s own subsidiary Parlance Systems provides outsourced, inbound/outbound call center services to the DTH subscribers of Echostar in the US.

Parlance has been providing these services since March 2002, growing from an initial 50-seat operation to about 1,250 seats today. With a total of around 1,500 Parlance employees dedicated to handling its requirements, Echostar has become the largest single company outsourcer to a Philippine call center.

Ergen visited the facilities and operations of Parlance, which now handles close to 20 percent of total Echostar enterprise customer service calls. Parlance is the first Echostar outsourced customer service call center servicing Echostar’s over 11 million DTH customers in the US.

Since the start of its operations, Parlance has handled close to 27 million calls for Echostar for both inbound customer service requirements as well as outbound sales.

There are reports that a memorandum of understanding covering the proposed $85-million PLDT-Echostar venture and that under the joint venture, Echostar will provide not only the set-up boxes and home antennas but also will make available to PLDT more than 2,000 video and audio channels, and video-on-demand services, that it currently offers to its 11 million American subscribers.

It was also reported that PLDT is looking at establishing another subsidiary that will provide content for this new satellite TV venture. Acquiring an existing broadcasting network would be the best way to produce shows for this DTH business but PLDT officials revealed that they can always outsource the content.

PLDT was among the first to have expressed interest in acquiring ABC-5 from then owner Edward Tan even before PLDT entered into talks with GMA 7 but because Tan was not really keen on selling at that time, they could not agree on a price. Tan later agreed to sell to Cojuangco at a much, much lower price than what PLDT offered.