Globe: Proposed takeover of Bayantel will spur competition 

Ayala-led Globe Telecom Inc. said its proposed acquisition and rehabilitation of Bayan Telecommunications Inc. is "pro-competition, pro-consumer, and pro-fair trade" because it will allow the cash-strapped company to keep operating.

 

“The impending rehabilitation of Bayantel, a subsidiary of listed Lopez Holdings Inc., will create a vibrantly competitive atmosphere in the telecommunications industry that would augur well for customers,” lawyer Froilan Castelo, general legal counsel of Globe, said.

 

In September, Pasay City Regional Trial Court Branch 158 approved the debt restructuring and master restructuring plan that will give Globe a 56.6-percent stake in Bayantel in a debt-to-equity conversion deal. The conversion is expected to lower Bayantel's debt to $131.3 million from $423.3 million.

 

Globe said the court-approved rehabilitation of Bayantel will let it continue operating as a key service provider in Eastern Visayas, which has long been a focus of Bayantel for fixed line services.

 

“The rehabilitation of Bayantel will mean more competitors in the industry serving a very broad and rapidly growing market especially for its niche in fixed-line services and data connectivity with strong social media implications," Castelo said.

 

Bayantel’s core revenues grew eight percent to P5.22 billion while data-service revenues posted a double-digit 11 percent growth to P3.56 billion in 2012.

The company’s digital subscriber line (DSL) revenues, meanwhile, grew year-on-year by 13 percent to P1.7 billion in 2012 as number of subscribers rose 12 percent to 132,000.

 

Philippine Long Distance Telephone Co. has opposed the proposed acquisition saying it violates laws governing telecommunications and the allocation of radio frequencies. — JDS, GMA News