Globe junks merger with BayanTel

Globe Telecom has temporarily abandoned merger plans with the Lopez-owned Bayan Telecommunications as it focuses on operational changes brought about by its recent acquisition of Isla Communications Co. (Islacom).

Jaime Augusto Zobel de Ayala II, Globe chairman, pointed out that the company currently has its hands full and cannot handle another addition to its corporate family.

"Right now, there is a need for us to ensure that our relationship with Islacom will work. There are still a lot of things to be addressed at this time," he explained.

Globe is expected to complete the acquisition process by the fourth quarter of the year but alignments are already underway to ensure that Islacom complements whatever services its mother company will provide.

Islacom will become a wholly owned subsidiary of Globe while the latter will be jointly owned by Ayala Corp., Singapore Telecom International and DeTeAsia.

Although Zobel acknowledged that Globe may need to align or buy another telecom firm in the future, he noted that such a move is not a priority for the short term.

While Globe has been very keen on consolidating with BayanTel two years ago, things suddenly changed when its foreign investor, STI decided to further strengthen its mobile phone business.

Islacom, incidentally, fits STI's requirement more than BayanTel since the former has a cellular phone network compatible with that of Globe aside from having installed about 700,000 landlines in the Visayas.

BayanTel, on the other hand, only has a fixed-line business with about 300,000 subscribers even as it continues to rollout aggressively in other places of the country and has a pending application to offer wireless services.