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Telstra to enter Philippines telecom industry partnership with San Miguel

Telstra confirmed on Friday (August 28) that it is planning to invest in the Philippines telecom industry in a joint venture with San Miguel Corporation. The Melbourne-based company also indicated its hunt for financing for the project. It has been selecting banks that can provide funding for the mobile venture.

“We are in discussions in relation to these matters,” Telstra stated. It also specified that both the parties are still talking on the matter and there was hardly any confirmation of success yet.

San Miguel is one of the largest companies of Philippines. It has invested in various businesses ranging from canned food to energy drinks and beer. Telstra CEO Andy Penn said that Asia constitutes one of the key elements in the growth strategy he has formulated for the company. In 2014, the company spent US$697 million (AU$972 million) to buy global telecom firm Pacnet Ltd. so that it could access undersea cables to connect Asia and the Pacific.

“We note recent speculation concerning Telstra considering an investment in a wireless joint venture in the Philippines with San Miguel and that financing is being sought in relation to that joint venture,” Telstra told the Australian Securities Exchange. The points put forward by Telstra indicate investment of millions of dollars in the joint venture with San Miguel, likely to be its subsidiary Vega Telecom.

 A reply on Telstra official page

Telstra played fair by choosing a country that is not only densely populated but also lacks high-speed 4G services. The company’s aim is clear about establishing 4G network across the nation, the telecom market of which will be led by two brands – PLDT and Globe Telecom. On the other hand, San Miguel seems putting tough efforts to make 4G accessible all over Philippines. The governments of other countries allow 4G spectrum on lease for a particular period, while Philippines authorities allow carriers to use it for an indefinite period.

Telstra’s technical partner Ericsson could help it get the 4G services at comparatively lower price, but the CEO of the network provider said he was not concerned with Telstra’s business in Asian regions and it preferred dealing directly with the carriers.

The Australian telco, however, noted that "no agreements have been reached in relation to these matters and there is no certainty" that the joint venture will happen.

No further details have been disclosed as the agreement has not been finalized.

In a separate disclosure to the Philippine Stock Exchange in July, San Miguel said it will pay P5.75 billion ($123.15 million) in cash to buy out its Qatar-based partner in its subsidiary Liberty Telecoms Holdings, Incorporated.

This is to hold 51.01% stake in Liberty Telecoms.

In June, San Miguel president and Chief Operating Officer Ramon Ang said his company is "not in a hurry to replace [its Qatar-based partner] with a new one. Many are interested but we have yet to make a decision."

Qtel West Bay Holdings S.P.C. owned 23.36% of Liberty while White Dawn Solution Holdings and wi-tribe Asia Limited had stakes of 18.44% and 2.86%, respectively, in the company as of end-March.

Prior to the transaction, Vega Telecom, Incorporated held 35.73% stake in Liberty Telecom.

San Miguel had also announced Vega Telecom bought Express Telecommunications Incorporated (Extelcom) and Vega’s investment in High Frequency Telecommunications Incorporated.

Extelcom, owned by the Ongpin Group and UK-based Ashmore Investment Management Limited is the country’s first mobile telephone operator.

Liberty Telecoms offers 4G internet to the consumer and corporate markets through Wi-tribe.

Telstra is Australia’s largest telco and has been in the Philippines for over six years.

In 2013, Telstra  launched  first ever Telstra directly operated customer service centre in Makati .

Now Telstra opening another customer service centre in Cebu.

 Visit: http://philippines.careers.telstra.com/Home

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