Aussies to shake up “lousy” Philippine mobile phone service
Australian telecom company Telstra will invest $1 billion into a joint venture with Philippines conglomerate San Miguel Corp as the firm looks to new areas of growth by disrupting the Philippines’ mobile phone duopoly of Philippine Long Distance Telephone Company and Globe Telecom.
The company is said to be near completion of a deal with San Miguel to take a 40 per cent stake in the new joint venture.
At its annual investor day in Sydney on October 29, Telstra CEO Andy Penn said the company would not spend more than $1 billion to establish the joint venture, with additional financing for the new operation to come from San Miguel and banks.
“An investment from Telstra would be less than $1 billion… basically to get to a point to start up the business, invest capital, build out the network and make it cash flow positive so it’s effectively self-financing,” he said.
Penn added the service offered by the two operating telcos was “lousy” and that Telstra — aided by San Miguel — would be able to “disrupt the duopoly” and win market share.
While the Philippines has a mobile phone penetration rate of more than 100 per cent, its services are dominated by slower 2G services. If Telstra finalises its deal with San Miguel, it could see the two companies roll out much faster 4G services that would be very popular with the nation’s smartphone users. The mobile phone market reaped a combined $1.5 billion in income last financial year.
“The Philippines market, from a mobile perspective, is interesting because there are only two incumbent operators. The margins in the Philippines are relatively strong and were we to complete a deal, the partner should be a very strong one,” Penn said.
“Frankly let’s face it, go to the Philippines and experience the lousy service you get from the incumbent operators and you will see there’s the opportunity for a new operator to provide a much better quality service… I think there’s a significant opportunity,” he added.
Australian telecom company Telstra will invest $1 billion into a joint venture with Philippines conglomerate San Miguel Corp as the firm looks to new areas of growth by disrupting the Philippines’ mobile phone duopoly of Philippine Long Distance Telephone Company and Globe Telecom. The company is said to be near completion of a deal with San Miguel to take a 40 per cent stake in the new joint venture. At its annual investor day in Sydney on October 29, Telstra CEO Andy Penn said the company would not spend more than $1 billion to establish the joint venture, with additional financing for...
Australian telecom company Telstra will invest $1 billion into a joint venture with Philippines conglomerate San Miguel Corp as the firm looks to new areas of growth by disrupting the Philippines’ mobile phone duopoly of Philippine Long Distance Telephone Company and Globe Telecom.
The company is said to be near completion of a deal with San Miguel to take a 40 per cent stake in the new joint venture.
At its annual investor day in Sydney on October 29, Telstra CEO Andy Penn said the company would not spend more than $1 billion to establish the joint venture, with additional financing for the new operation to come from San Miguel and banks.
“An investment from Telstra would be less than $1 billion… basically to get to a point to start up the business, invest capital, build out the network and make it cash flow positive so it’s effectively self-financing,” he said.
Penn added the service offered by the two operating telcos was “lousy” and that Telstra — aided by San Miguel — would be able to “disrupt the duopoly” and win market share.
While the Philippines has a mobile phone penetration rate of more than 100 per cent, its services are dominated by slower 2G services. If Telstra finalises its deal with San Miguel, it could see the two companies roll out much faster 4G services that would be very popular with the nation’s smartphone users. The mobile phone market reaped a combined $1.5 billion in income last financial year.
“The Philippines market, from a mobile perspective, is interesting because there are only two incumbent operators. The margins in the Philippines are relatively strong and were we to complete a deal, the partner should be a very strong one,” Penn said.
“Frankly let’s face it, go to the Philippines and experience the lousy service you get from the incumbent operators and you will see there’s the opportunity for a new operator to provide a much better quality service… I think there’s a significant opportunity,” he added.
