Australian telecommunications company Telstra will spend up to US$1 billion for a planned wireless joint venture with San Miguel Corporation in the Philippines, the company’s CEO Andrew Penn told investors today.
That’s just Telstra’s share in the joint venture. Partner San Miguel, a conglomerate with diversified interests in the Philippines, will also invest in the business, along with some banks that will provide financing.
“We are not expecting it to be more than US$1 billion. That would be essentially Telstra’s equity investment. We could own 40 percent of the venture, which would also have external financing as well,” Andrew Penn was quoted as saying by The Australian.
Currently, Telstra and San Miguel have not reached a deal yet, but talks are ongoing.
If this deal pushes through, they are expected to shake up the Philippine existing telco industry major players PLDT and Globe Telecom in the archipelago.
“Frankly, let’s face it, go to the Philippines and experience the lousy service you get from the incumbent operators and you will see that [there’s] opportunity for a new operator to provide a much better quality service … I think there’s a significant opportunity,” CEO Andrew Penn was also quoted as saying.
San Miguel is reportedly rolling out its mobile telecommunications network in the Philippines through a division Bell Telecommunications.
San Miguel Corporation president Ramon Ang has previously stated, they have been waiting for the right time to enter the mobile business but has delayed because of other acquisition opportunities.
Over the past years, San Miguel has aggressively moved away from its traditional food and beer businesses and into heavy industries such as infrastructure, power, oil refining, and telecommunications.
This will not be Telstra’s first time to break into Asia telcom industry. Earlier this year they acquired Singapore- and Hong Kong-based internet services provider Pacnet for US$697 million. That deal was part of a A$5 billion (US$3.56 billion) budget it allotted for Asian ventures.
What do you think of Telstra’s proposed joint venture with San Miguel?
Will it help improve telecommunication services in the Philippines?
Join the discussion.