GMA in talks with PLDT, Globe for tie-ups

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GMA is eyeing to forge 'content' partnerships with the top 2 telecommunications firms as it looks to improve profit growth

A security guard for local television network GMA talks on his mobile phone outside the company's offices in Manila on March 2, 2012. AFP PHOTO / JAY DIRECTO

MANILA, Philippines – Television giant GMA Network Inc. is in talks with telecommunications firms for content partnerships as it looks to improve profit growth.

GMA booked higher first-half profit, thanks to political advertisements during the election period, but its second-quarter performance was lackluster.

To help boost its bottom line, the company wants to distribute media content to telecommunications companies Philippine Long Distance Telephone Co. (PLDT), led by Manuel V. Pangilinan, and Globe Telecom Inc. of the Ayala group.

“We are talking to them, both Smart and Globe,” said GMA chairman and CEO Felipe Gozon. Smart Communications Inc. is the mobile phone arm of PLDT.

Revived PLDT talks

Gozon however clarified that any partnership that will be signed will only cover content. “There are no mergers and acquisitions. There is no buyout.”

PLDT had long courted GMA for a stake. Discussions between the two fell through in October 2012 after they failed to arrive at “mutually accepted” terms.

PLDT wanted to buy GMA so it could provide content amid declining returns from its traditional telco business. It was part of a convergence strategy.

After talks with GMA failed, PLDT said it was still pursuing this strategy by building on its existing media asset TV5.

PLDT acquired TV5, the country’s third-largest television network, in 2009.

ABS-CBN-Globe tie-up

GMA is the only one among the biggest networks that has yet to strike a partnership with a telco firm.

PLDT has TV5. In May, ABS-CBN entered into a deal with Globe that allows Globe to deliver ABS-CBN content across its services. The deal also allows both companies to share assets such as servers and towers.

Gozon said even without any telco deal, GMA will end the year with higher profit.

“We are looking at a 10% growth if we get lucky because of lower expenses and higher ratings,” Gozon said.

GMA’s net income for the quarter ending June dropped 14.9% to P533 million, reports sent to the Philippine Stock Exchange showed. Excluding pol ad revenues, GMA’s advertising revenues fell 8%.

In the first 6 months, however, GMA’s net income rose 12% to P1.135 billion. –

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