Lopez, Ayala groups launch ‘3rd telco’ player

MANILA, Philippines (UPDATED) – The Lopez and Ayala business groups will release a new service called ABS-CBN Mobile, which both groups are positioning to become the 3rd player in the local telco industry and will complement the market segments of the current 2nd largest telco player.

Following the announcement by media group ABS-CBN Corp and Globe Telecom of their “network sharing agreement,” officials of both companies announced the new service, which is set to go live before yearend.

“It’s a separate mobile brand,” ABS-CBN chairman Eugenio Lopez III said at a press and analyst briefing on Tuesday, May 28. “You have Smart, Globe and, now, ABS-CBN Mobile.”

In the local mobile business, Smart Communications lords it over with about 70% share of the over 100 million subscribers, while Globe has about 30%.

When ABS-CBN Mobile starts operating in the second half of 2013, subscribers can make phone calls, send text and avail of data services, officials said. 

Its edge will be the content from ABS-CBN, currently the biggest media group in the country, with presence in broadcast, print, and online.

“We’re shooting for ABS-CBN Mobile to be a sizable player in the telecoms market,” ABS-CBN Convergence president Carlo Katigbak said. “Almost half of our users are already accessing our shows via mobile devices.”

“When we launch ABS-CBN Mobile, we’re looking at producing content that is not going to be available on the traditional platforms, like television. These content will be available exclusively via our mobile subscribers,” Katigbak added.

Katigbak said ABS-CBN is investing into the new venture between P2 billion and P3 billion over the next 3 years for communication equipment and working capital. 

Telco market segments

There is no cannibalization of markets, according to Globe, which has been strong in the post-paid segment of the telco business.

“We do believe that there is a segment out there that ABS-CBN Convergence and ABS-CBN Mobile that will be able to address,” Globe president and CEO Ernest Cu hinted.

“[This is the] market segment that is highly centric to the content of ABS-CBN,” he added.

As part of the agreement, ABS-CBN Mobile will piggyback on the mobile phone infrastructure assets of Globe, including its servers, towers, and switches nationwide, as well as the frequencies the government has awarded to the Ayala-led telco.

Globe’s capacity can handle the additional demand as it is currently undergoing the last phases of its US$700 million network modernization program, officials said. – Rappler.com

*$1 = P43.9486