Telstra to enter Philippines telecom industry with San Miguel

By @pathakmishra on
A Telecommunications Tower Managed By American Tower In Golden, Colorado
A telecommunications tower managed by American Tower is seen in Golden, Colorado February 25, 2014. American Tower Corp will be announcing their 2013 quarter four earnings on February 25. Reuters/Rick Wilking

Telstra confirmed on Friday 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.

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.

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