MANILA, Philippines - Australia’s biggest telecommunications company Telstra said discussions with San Miguel Corp. for a possible wireless joint venture in the Philippines remain ongoing.
This as Telstra declined to comment on a report commissioned by Hong Kong-based Stolzenberg & Associates that raised shareholder concerns on the planned joint venture with San Miguel.
“No further comment from Telstra other than what we have said previously,” the Australian firm’s investor relations group said.
Telstra earlier said no agreement has yet been signed and there is no certainty a deal could be reached.
Based on the report compiled by Steve Mackay, principal of Creator Tech Pty Ltd., the joint venture would require a bigger budget.
He said it was unclear if Telstra shareholders had been aware of the open-ended costs that could be incurred in providing a 4G service to consumers living in a developing country whose population is spread over an archipelago of over 7000 islands.
“Our analysis, which is ongoing, suggests that Telstra’s management may need to do a lot more detailed work on the costs associated with the proposed Philippines joint venture,” Mackay said.
As such, Mackay said Telstra should provide shareholders with a full and transparent business plan before shareholders can be satisfied that management has done proper due diligence on the Philippines foray.
Mackay also noted concerns over the ownership of the 700 megahertz band, which is considered the most valuable frequency range for 4G technology.
“The major operators in the Philippines – Philippines Long Distance Telephone Co. and Globe Telecom Inc. – have foreshadowed legal action…seeking to compel the National Telecommunications Communication to order San Miguel to relinquish ownership of the critical 700 Mhz spectrum and to put it to public auction,” the report noted.
In October, SMC president Ramon Ang said the new network could likely be in place next year.