Philippine conglomerate San Miguel corporation is selling its telecom business to incumbent operators PLDT and Globe following the collapse of its JV negotiations with Telstra.
Under the agreement, San Miguel will sell its telecom unit Vega Telecom for 69.1 billion pesos ($1.48 billion) inclusive of 17.02 billion pesos worth of liabilities. PLDT and Globe will each acquire half of the business.
Vega Telecom owns controlling stakes in multiple telecom-related units. These are BellTel, Eastern Telecommunications, Cobaltpoint Telecommunication (formerly Extelcom), Tori Spectrum Telecommunication (formerly Wi-Tribe) and Hi-Frequency Telecommunication.
The acquisition will finally grant PLDT and Globe access to radio spectrum in the coveted 700-MHz band, which San Miguel currently holds a monopoly on.
PLDT and Globe have been petitioning the government for years for access to this spectrum, but the regulator had so far declined to act to recall the spectrum.
In addition to the 700-MHz spectrum the acquisition also covers frequencies in the 900-MHz and 1800-MHz bands, PLDT said in a stock market filing.
But as part of the deal, PLDT and Globe have agreed to relinquish part of the 700-MHz, as well as 850-MHz, 2500-MHz and 3500-MHz bands to regulator NTC to allow the potential entry of a third operator into the market.
“This transaction offers a breakthrough opportunity, not only for the companies involved but also for the industry and the country. This will enable existing operators to provide significantly improved Internet and data services to the public and to our customers in the shortest possible time,” PLDT CEO Manuel V Pangilinan said in a statement.
“ At the same time, it leaves the door open for new entrants into the industry. Taken together, thiswill enable the industry to better support the country's development efforts - especially significant with the onset of a new government."