One of the country’s leading business conglomerates, San Miguel Corp. (SMC) plans to sell their telecommunication assets to the leading telecommunications company in the Philippines, Globe Telecom and Philippine Long Distance Telephone Co.(PLDT). The joint telecom buyout of SMC’s business will further cement the duopolistic hold of PLDT and Globe in the telecom business amid the growing clamor for better internet services.
Earlier reports stated that San Miguel Corp. plans to launch a rival service this year but their plans did not materialize after their international partner Telstra pulled out from the supposed agreement of competing against Globe and PLDT.
According to the some sources of the latest development of SMC’s telecom business, the said deal between PLDT, Globe and SMC have agreed on principle that the transaction would be worth a little more than $1 billion. The agrement between Globe, PLDT and San Miguel is scheduled to be singed between the transacting parties this morning.
It is expected to be the biggest deal of its kind since PLDT restored the telco duopoly in 2011, when it acquired the Gokongwei family’s Digital Telecommunications Philippines Inc. (Digitel), which operates Sun Cellular.
SMC’s prized assets include its high-band frequencies necessary to address capacity and its coveted 700 Megahertz spectrum, a type of low-band frequency noted for its ability to cover wide spaces and penetrate walls at lower costs. It also owns physical assets like cell sites, which PLDT and Globe said remained difficult to build because of bureaucratic red tape.
SMC owns almost all of the 700 MHz spectrum (694 MHz to 790 MHz), previously assigned for analog television broadcasting before it was shifted for telecommunications use as TV migrated to digital. San Miguel Corporation would have used this to carpet the country with a “better and cheaper” mobile Internet service.