SMC aims to be strong telecom player

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. (SMC) wants to position itself as a very strong player in the local telecommunications industry in a bid to further improve telco services in the country and bring down rates to more affordable levels.

SMC president Ramon Ang told The STAR that among the telecommunications companies being offered to them for possible acquisition are Eastern Telecom, Express Telecommunications (Extelcom), and Bell Telecommunications.

At present, SMC has a 32.7-percent stake in Liberty Telecom Holdings via Vega Telecom. It has also signed a memorandum of agreement with Qatar Telecom, which also holds shares in Liberty, to explore areas on wireless broadband and mobile communications pro-jects. He said they have an option to go up to 49 percent.

Ang confirmed that he has received offers for a possible stake in Extelcom, Eastern, and BellTel but the choice will boil down to which company will offer the best value for SMC.

In the case of Extelcom, the negotiations with Trans Digital Excel Inc. (TDE), the majority shareholder of Extelcom and owned by businessman Roberto ‘Bobby’ Ongpin for the acquisition by SMC of TDE’s stake will depend on the final outcome of the case filed by the Lopez group that questioned the dilution of the latter’s stake in Extelcom and the resulting increase in TDE’s shareholdings.

While the Supreme Court has already denied the petition filed by Bayan Telecommunications to reverse the dismissal by the Court of Appeals of its opposition to the rehabilitation plan of Extelcom, Ang said this has yet to attain finality.

Ang pointed out that they are interested in buying Extelcom because of the frequencies that it owns.

Earlier, ISM Communications, also owned by Ongpin’s group, confirmed that it is in talks with SMC for a possible acquisition by the latter of a stake in Eastern.

As for BellTel, he said that while he has received an offer, the company still needs a lot of cleaning up. “We need to know what frequency it owns and whether this will add value to us,” Ang noted.

SMC’s acquisition of a stake in Liberty allowed it to go into wireless broadband. Asked when the commercial launch of its wi-Tribe brand of wireless broadband services will be, he said they are now doing signal testing.

He added that they have already invested a few billions of pesos for the roll out of the wireless broadband network. “We want to rollout nationwide,” he said.

Ang expressed particular interest in voice over the Internet (VoIP) applications, although he admitted that they remain very interested in going into mobile cellular telephone services. “If given the opportunity to go into cellular, we will,” he said.

He explained that there is room for a significant fourth player in the telecommunications industry and the cellular mobile telephone system (CMTS) business, as well as for improved telecommunications services and rate.

The SMC official said the while the world telecommunications industry is generating an average gross profit of 28 percent, the top two CMTS operators here are making as much as 65 percent. “They are making a killing because there is no real competition,” he stressed.

He added that while regionally, the interconnection rates are low at 20 cents, here, it is as high as P6 per minute.

Ang also noted that while the presence of a third player in the mobile telephony industry, has helped bring down rates and improve services of the two others, there is still no real competition.

“As a fourth player, we aim to improve service and rates for the benefit of the Filipino people,” he emphasized.