SUMMARY
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MANILA, Philippines – Business direction remains the same for the Philippine Long Distance Telephone Company (PLDT) and Globe Telecom, Incorporated, even if joint venture talks between Telstra Corporation and San Miguel Corporation (SMC) collapsed.
The shares of PLDT and Globe increased after the announcement of the collapsed talks.
PLDT shares went up 10% as of 10 am, Monday, March 14.
Shares of Globe also shoot up 7.9%, the sharpest gain since June 2013.
SMC’s Liberty Telecom shares declined by 16% at P3.60 as of 12 noon in Manila trading.
The stocks’ performance indicates that the announcement is feeding positive sentiment on PLDT and Globe, while bringing negative news to SMC.
PLDT and Globe shares have underperformed in the past months due to the anticipation over the expected launch of a third major telecommunication player by 2016.
Globe’s concern
“I’ve been asked if this latest development changes PLDT’s strategy. The short answer is: No, it doesn’t,” PLDT Spokesperson Ramon Isberto said in an e-mail. (READ: San Miguel Corp, Telstra end joint venture plan)
For Globe President and CEO Ernest Cu, the new development about Telstra ending its plan of entering the Philippine market “does not change anything” in the telco’s business direction.
According to Cu, the more serious concern in the latest Telstra development is the need to fairly re-allocate the 700 megahertz (MHz) frequency band, mostly held by SMC.
“The more serious concern is why SMC is being allowed to hold on to the entire 700 Mhz band. We call on the NTC [National Telecommunications Commission] to immediately distribute the 700 Mhz for fast deployment of high-capacity LTE based wireless and fixed broadband that would benefit the entire country,” Cu said in a statement.
The chief of Globe added that the Philippines is one of two remaining countries in Asia Pacific with pending issues that prevent the utilization of the 700 Mhz frequency.
Enhancing PLDT’s capacity
Telstra announced Sunday, March 13, that it ended talks with SMC over a planned joint telecommunications venture in the Philippines, after both were unable to agree on an equity investment.
“[Our] chairman and CEO, Mr. Manuel V. Pangilinan, has said that our plans for 2016 already take into account the entry of a new player…As we stated in the past, with or without a new player, we are vigorously pursuing our digital pivot strategy which involves a broad range of initiatives,” Isberto said.
The PLDT executive said this includes major enhancements of the capacity and resiliency of the telco’s fixed and mobile networks, “which will progressively benefit our customers this year and next.”
PLDT last month announced an elevated capital spending budget of P43 billion ($906.10 million), would be used to activate more 3G base stations and at the same time expand its Time Division-Long Term Evolution (TD-LTE) and Frequency Division- LTE (FD-LTE).
“This enables us to offer improved data services such as our 1 Gbps offer on our fiber to the home service and the aggressive roll-out of our 3G and 4G services on mobile… Finally, we are strengthening our portfolio of compelling digital services for both consumers and enterprise customers,” Isberto said.
Globe also upped its capital spending budget this year to $750 million, as it accelarates its 4G LTE rollout and upgrade its fixed line systems to better accommodate enterprise and backhaul services. – Rappler.com
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