San Miguel and synergy of telco, tollroad units

Rappler.com
The diversifying conglomerate is taking advantage of the synergies between 2 recently acquired business units: ETPI and TPLEX

MANILA, Philippines – Diversifying conglomerate San Miguel Corp. is taking advantage of the synergies between 2 recently acquired business units.

On Wednesday, March 21, San Miguel’s telecommunication unit said it would be laying its fiber optic cable (FOC) facility along the Tarlac-Pangasinan-La Union Expressway (TPLEx).

This tollroad would serve the needs of Eastern Telecommunications Philippines, Inc. (ETPI) and its subsidiary Telecommunications Technologies Philippines, Inc. (Teletech) that are expanding outside of Metro Manila. A key target sector of telco companies — the business process outsourcing (BPO) —  are setting up operations there.

Connecting Metro Manila and areas in northern Luzon is a road network that includes TPLEx. San Miguel is part of the consortium that is building the 88.58 kilometer tollroad project scheduled to open by 2013.

San Miguel also now owns 77% of ETPI after it bought the remaining 37.7% stake of ISM Communications Corp. in ETPI for P1.5 billion in October 2011.

Other telecommunication companies under San Miguel are Bell Telecommunications Philippines Inc, and Liberty Telecoms Holdings, Inc. San Miguel has a 41.5% stake in Liberty.

Synergies

Synergies among tollroads and other utility firms have been tapped by other diversified conglomerates before.

For example, when the Pangilinan-led firms pursued the acquisition of a controlling stake in power distribution firm, Manila Electric Co. (Meralco), executives cited some P8 billion worth of synergies that other businesses of the group could take advantage of. 

These include the group’s stake in North Luzon Expressway (NLEx) where electicity posts could be put up. Sharing real estate translates to savings for Meralco and other units of the group.

Pangilinan-led phone giant Philippine Long Distance Telephone Co. (PLDT) also utilize the Meralco posts, as well as NLEx, for its physical telecom network requirements. An executive of the group has previously described this synergy between Meralco and PLDT as a “pole relationship.”

The Pangilinan and the San Miguel groups have both been eyeing other tollroad projects to complement their other business. These road projects include the Subic-Clark-Tarlac Expressway (SCTEx), the South Luzon Expressway (SLEx) and its expanded network, and the NLEx-SLEx Connector Link.

Network expansion

San Miguel’s ETPI is keen on expanding their operations in the lucrative telco industry.

In the south, ETPI currently has FOC connecting its Makati head office and its Nasugbu, Batangas technical operating center via Cavite, Laguna and Batangas provinces.

TTPI also has FOC link up to Calamba, Laguna and is in the planning stage of extending this FOC facility to Bicol, Visayas and Mindanao.
 
ETPI is a part owner and has assigned capacities in the National Digital Transmission Network (NDTN), a nationwide telecommunications backbone that links the various islands and provinces in the country and provides connection to consortium member. ETPI is using its assigned capacities in NDTN to extend its network to the various parts of the contry.
 
“While the ETPI nationwide telecommunications network is being implemented, TTPI has been sending its own subscribers’ traffic through the other inter-exchange carrier (IXC) operators,” said TTPI in a filing with the National Telecommunications Commission (NTC). – Rappler.com

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