PLDT gobbles up Digitel for P69.2B

MANILA, Philippines - Telecommunications leader Philippine Long Distance Telephone Co. has acquired a majority stake in Gokongwei-owned Digital Telecommunications Philippines Inc. for P69.2 billion, with an option to acquire 100 percent through the buyout of minority shareholders, officials of the two companies said yesterday.

Digitel owns 100 percent of Digitel Mobile Philippines Inc. which markets the Sun Cellular brand. It as well has a substantial fixed line and broadband business.

The country’s telecom landscape

"Even though this initiative alters the country’s telecom landscape, we expect competition within the industry to remain very robust given that other operators, including new entrants, are formidable and so then-funded. And as I have alluded to in previous statements, we face growing competition not just from other telcos nevertheless also from the so-called "over the top" or OTT service providers that offer social networking, instant messaging and VoIP (Voice over Internet Protocol) services," he pointed out.

He as well said in an interview that the partnership can open doors for future businesses between the two groups, even between Metro Pacific Investments Corp. and JG Summit, both of which are into power.

As this developed, Globe Telecom president Ernest Cu said the combination of PLDT and Digitel in the mobile, fixed line and broadband space will not fundamentally change their own strategy. "We stand ready to compete, and to defend and grow our market share. This industry has always been intensely competitive, and we have been a strong challenger to a dominant incumbent all this time. We will continue to focus on delivering relevant products to our retail and corporate clients, providing differentiated customer service, and enhancing our network to deliver the best experience possible to our subscribers," he stressed.

The combined expertise of the PLDT Group

"It will leverage the combined expertise of the PLDT Group and Digitel to create a more capable telecommunications company which will be better-positioned to provide higher quality and furthermore affordable services to fixed line, wireless, and broadband subscribers addressing a wide range of consumer demand - from voice to SMS to data and Internet and video services," PLDT president Napoleon Nazareno said.

PLDT noted that Digitel’s fixed line operations can complement its own in terms of both geographic and population reach, during adding around 450,000 subscribers to PLDT’s current base of 1.8 million subscribers. "PLDT can quickly provide enhanced broadband services in Digitel’s service areas. Digitel’s subscribers are as well expected to benefit from PLDT’s extensive infrastructure, particularly its nationwide fiber optic network and its international cable and satellite facilities," it said.