Rumors have been circulating that the two have explored a possible partnership following the deal between Philippine Long Distance Telephone Co. (PLDT) and Digital Telecommunications Philippines Inc., which, if it pushes through, will “probably kill” Globe, the second-largest phone firm in the country.
The talks, though unconfirmed, did not prosper. Globe is jointly owned by Ayala Corp. and Singapore Telecommunications Ltd.
“Globe denies having any merger discussions with SMC or Liberty Telecom,” said its chief financial officer Albert de Larrazabal. The company, he added, remains focused on its strategies to aggressively compete and gain market share.
Liberty also stated the same. “We advise that SMC is not in talks with Globe,” said its corporate information officer Catherine Carpio.
SMC owns about 41% of Liberty through its unit Vega Telecom. It earlier disclosed that it would buy up to 49% of Liberty.
Liberty, a joint venture between SMC and Qatar Telecom (QTel), aspires to become a major player in the wireless-broadband sector amid stiff competition from major players that are also already offering WiMax (Worldwide Interoperability for Microwave Access) service.
SMC, according to its president Ramon Ang, is now in full swing to build a brand-new mobile-broadband network that will be robust and reliable.
”Our network will address voice and data capacity, which we all know are very much congested resulting in rampant dropped calls and slow data speeds. Be a little more patient, our services will soon make a huge difference,” he said.
Ang, in a text message, said SMC is also not interested in entering into any kind of partnership or merger with Bayan Telecommunications Inc., which had just agreed to sell its core assets to Multimedia Telephony Inc. “We are not in talks,” he said.
SMC is strongly committed to offer the Filipino consumer a robust and reliable telecommunications alternative to the existing duopoly. With the third player, Sun Cellular, joining the dominant carrier, it does not follow that the Filipino consumer will have no other choice, noted telco experts.
“In the near-term, we expect competition to defend its market position and healthy margins by scaling down on its unlimited offerings which have “minimally” eroded the existing telco’s 60% to 65% Ebitda [earnings before interest, taxes, depreciation and amortizations]margins,” an industry source said.
The source added that SMC is unlikely to cooperate with the two existing players and that these margins are still way above other global and regional operators who only enjoy 30% to 35% cash-flow margins.
