PLDT open to telco partnership with SMC

For the unused 700 MHz frequency spectrum

MANILA, Philippines – Philippine Long Distance Telephone Co. (PLDT) is open to forging a partnership with San Miguel Corp. (SMC) for the use of the latter’s 700 megahertz (MHz) frequency.

“We are always open,” PLDT chairman and chief executive officer Manuel V. Pangilinan told reporters on the sidelines of the telco’s first quarter financial results press briefing when asked if the firm would be open to partnering with SMC for the 700 MHz frequency.

However, Pangilinan said there are no talks right now for a possible partnership.

SMC through companies wi-Tribe Telecoms Inc.  and High Frequency Telecommunications Inc., holds the bulk of the 700 MHz frequency band.

Both PLDT and Globe Telecom Inc. want a piece of the 700 MHz and have called on the National Telecommunications Communication for the reallocation of the spectrum. The 700 MHz frequency is considered key to providing faster Internet speeds at lower investment requirements relative to other frequencies.

The 700 MHz band, which can penetrate buildings and walls, allows the deployment of a high-capacity LTE based wireless and fixed broadband network to deliver higher data rate and LTE wireless broadband service at more affordable costs.

Earlier, Globe president and chief executive officer Ernest Cu said the Ayala-led telco would be open to acquiring SMC companies which hold the 700 MHz should they be up for sale.

Meanwhile, PLDT reported its core net income reached P7.2 billion in the first three months, down 22 percent from P9.3 billion in the same period in 2015.

PLDT’s net income also declined 34 percent to P6.2 billion in the first quarter from P9.4 billion in the same period last year.

PLDT Group chief financial officer Anabelle Chua attributed the lower net earnings for the first quarter to the P1.6 billion asset impairment incurred in the first quarter from the telco’s investment in German e-commerce investor Rocket Internet amid the dip in the latter’s share price.

PLDT’s investment in Rocket had declined to P13 billion at  24.61 euros per share as of the end of the first quarter from the P14.6 billion value at 28.24 euros per share at the end of 2015.

Rocket’s share price has slipped to 21 euros last week from a high of 29 euros on April 13, after the e-commerce investor cut the valuation of its online shopping business Global Fashion Group.

Consolidated revenues of PLDT grew slightly to P42.8 billion in the first quarter from P42.6 billion in the same period last year.

Expenses of the telco also rose 16 percent to P35.2 billion in the January to March period from P30.4 billion in the same three-month period in 2015.

As of the end of the first quarter, the group had 68.4 million wireless subscribers and 5.3 million broadband subscribers.

Based on the first quarter results, Pangilinan said PLDT is maintaining its guidance of full-year core earnings at P28 billion this year.

“Our experience in the fixed line business shows how growth can be restored by progressively building up our data and broadband revenues to critical mass. We aim to achieve that same critical mass in the wireless business by accelerating data adoption and usage, even at the price of renewed deceleration of our legacy revenues,” he said.