San Miguel moves to acquire BellTel

MANILA, Philippines - San Miguel Corp. (SMC) has reportedly shifted focus on Bell Telecommunications (BellTel) as a potential acquisition target following legal problems being encountered in its bid to acquire Express Telecommunications (Extelcom).

In an earlier interview, SMC president Ramon Ang told The STAR that they are still hoping to acquire Extelcom despite legal difficulties on the purchase.

SMC is in talks with a company controlled by businessman Roberto Ongpin for the acquisition of the latter’s stake in Extelcom. However, Marifil Holdings Corp., a firm controlled by Bayan Telecommunications, has questioned in court Transdigital Extel’s stake in Extelcom.

Lopez-controlled Marifil, which claims to still own 46 percent of Extelcom, said it will oppose the planned sale by TransDigital Extel to SMC of its stake in Extelcom and will continue to fight the alleged hostile takeover of Extelcom.

Marifil lawyer Ariel Tuybayan said they will pursue all legal remedies to reverse what they claim is an illegal dilution of their shares in Extelcom from 46 percent to eight percent. “Marifil is prepared to go all the way to the Supreme Court,” he added.

He pointed out that Marifil was deprived of its property in clear violation of the Corporation Code that requires the vote of shareholders holding at least two thirds of the outstanding capital stock. “How can corporate rehabilitation be abused to deprive a shareholder of its property without its consent?” he said.

Meanwhile, two of BellTel’s biggest publicly-listed shareholders – Liberty Flour Mills and South China Resources – have sold their stake in the telco to Two Cassandra-CCI Conglomerates, a shareholder of Liberty Telecoms Holdings which is partly owned by SMC.

Liberty Flour Mills informed the Philippine Stock Exchange that it is selling its investment in BellTel consisting of 600,000 common shares for P227.38 million to Two Cassandra-CCI.

Meanwhile, South China Resources also sold to Two Cassandra-CCI its 3.24 million shares in BellTel for P1.23 billion.

There have been speculations that BellTel will eventually be sold to SMC, which is looking at ways to expand its presence in the local telecommunications business.

BellTel is a full-service telecommunications company that began its commercial operations in January 2002. It is authorized to provide the full range of services throughout the Philippines, giving it access to all the central business districts (CBD) where 70 percent of the country’s commerce is transacted and special economic zones (SEZs) established under the Philippine Economic Zone Authority (PEZA).

With its scope of licenses to include local exchange carrier (LEC), international gateway facility (IGF), inter exchange carrier (IXC), very small aperture terminal (VSAT) and Internet service provider (ISP), the company offers an integrated package of services including local and long distance telephone services, high speed data connectivity, Internet services, cable TV and videoconferencing.

BellTel pioneered in the deployment of point-to-multipoint fixed wireless access technologies delivering multiple product offerings. BellTel also rolled out fiber-to-the-curb in the Makati central business district and entered into strategic alliances with underutilized telecom infrastructures (HFC, fiber optic) thus giving it multiplicity of cost-effective last mile options for rapid service deployment.

The company operates a domestic C-band satellite hub providing connectivity for customers in remote sites not yet covered by its wireless networks. BellTel’s MPLS ready backbone supports multiple services and protocols thus enabling provision of services to customers using legacy networks and migration of customer networks towards IP.

BellTel’s frequencies are for fixed wireless network use or for wireless local loop service, similar to Bayan’s Wireless Landline offering and Philippine Long Distance Telephone Co.’s Landline Plus service.

From fixed wireless network use, BellTel wanted these frequencies to be utilized for cellular mobile use. For this purpose, BellTel revised its application and sought for a provisional authority to operate a mobile phone network. The NTC approved BellTel’s request and issued a cellular permit in October 2007.

“With the mobile license, the company felt that it will be more beneficial and more advantageous to utilize the assigned 1.8-gigahertz spectrum for mobile service,” it said.