Foreign telcos mull entry into Philippines

MANILA, Philippines — Foreign telco players are interested in penetrating the Philippine market, which at present remains dominated by only two – Manuel V. Pangilinan’s PLDT Inc. and Ayala-led Globe Telecom.

Australia’s Telstra Corp. Ltd. and China Telecommunications are among the companies reportedly eyeing the Philippine market, several industry and government sources told The STAR over the weekend.

“Those are among the foreign telco companies interested in the Philippines,” one source said.

It is not yet clear how this can happen but they may tap a local partner and together, be the third player in the industry, or participate in the government’s P77.9-billion National Broadband Project.

“It could be a different strategy such as the broadband project,” said another source.

Telstra and diversified conglomerate San Miguel Corp. (SMC) earlier explored a possible joint venture to be the third telco player in the Philippines, but the talks bogged down last year.

The Australian giant was reportedly ready to invest $1 billion for the deal but even after announcing the joint venture would not push through, Telstra said at the time it remains committed to providing SMC technical expertise should it pushes through with a plan to be the Philippines’ third player.

Telstra officials have also said the company wants a third of its profits and revenue to come from overseas.

In 2015, Telstra officials were quoted as saying the telco was eyeing opportunities in Singapore, Hong Kong and Indonesia and cited Philippines as a potentially new growth market. The company also cited China and India as tough but potentially lucrative markets.

However, no official statement from Telstra has been issued regarding future plans in the Philippines after talks with SMC bogged down in 2016.

China Telecom, meanwhile, has already an established presence in North America, the US and Europe.

No official statement likewise has been issued by China Telecom regarding any plans to expand in the Philippines.

President Duterte said recently he wants a third telco player in the Philippines so that consumers can enjoy better mobile and internet service.

Sought for comment, meanwhile, Philippine Competition Commission chairperson Arsenio Balisacan said a third player in any industry can be good for consumers because it would improve competition.

“In general, in any industry, a third player will boost competition,” Balisacan said, declining to comment specifically on the telco industry because of the issue between PCC and telco players that is currently pending in court.

In 2016, at a time when the PCC was still in transitory phase, PLDT and Globe Telecom embarked on a co-acquisition of the telco assets of SMC for P69.1 billion.

The PCC insisted that it should be allowed to review the deal but the telcos said under the transitory rules of the PCC, the deal “only needed a notice” to the commission and is deemed approved.

However, the PCC maintained that it is only deemed approved if the notice is sufficient.

The case is pending with the Supreme Court.

Baliscan hopes that there would be a decision on the issue soon to address the uncertainty.

“Any decision is better than no decision,” Baliscan said, noting that it would clear things.