PLDT, Globe buyout of SMC telco 'win-win-win' for all companies – analysts

The recent announcement of publicly listed firms PLDT Inc. and Globe Telecom Inc. of plans to buy out and take over the telecommunication business of San Miguel Corp. (SMC) is a “win-win” situation for all the companies, analysts said on Monday.

“I think this is a win-win for all companies,” Alexander Adrian O. Tiu, senior equity analyst at AB Capital Securities, said in a text message.

With the new development, SMC will be able to focus on its core businesses, Tiu noted.

San Miguel is listed on the local stock exchange as a “food, beverage, and packaging company” which has since diversified into a conglomerate with business interests in the fuel and oil, energy, infrastructure, telecommunications, and banking industries.

Among its subsidiaries are San Miguel Brewery Inc., Ginebra San Miguel Inc., San Miguel Pure Foods Company Inc., and Petron Corp.

For the two telecommunications companies, Tiu said that along with the acquisition of the SMC telco business, they will also be able to utilize the highly-coveted 700-megahertz (MHz) frequency.

“SMC is able to focus on its other businesses while PLDT and Globe can now use the coveted 700 megahertz (MHz) spectrum,” he added.

Both companies had earlier called on the government, particularly regulator National Telecommunications Commission (NTC), to reallocate the 700 MHz frequency which was “unused” by San Miguel. 

"Harmonizing the 700 MHz spectrum will allow the industry to provide broadband and data services at faster speeds and in a more cost-efficient manner. This will ultimately redound to increased benefits for consumers," Globe general legal counsel Atty. Froilan Castelo said earlier this year.

The sentiment was mirrored by Luis A. Limlingan, business development head at Regina Capital Development Corp.

“Hopefully they can use that equipment and machinery just to improve the service for both telcos,” he said in a separate text message.

He noted, however, that with the duopoly of Globe and PLDT cemented by their acquisition of the SMC telco business, this may mean that Philippine internet prices – earlier promised by SMC to be cheaper once it rolls out its own telco firm – may remain uncompetitive.

“Less competition so the pricing will be less competitive... Hopefully the service will improve,” he added.

Share prices of SMC ended trading on Monday at P80.30 apiece, up P4.40 or 5.80 percent from the previous close of P75.90.

Meanwhile, shares prices of PLDT rose by P159.00 or 9.13 percent to P1,901.00 while those of Globe gained P122.00 or 5.58 percent to P2,310.00.

“There may be some volatility, but I won’t be surprised if it’s heavily traded,” Limlingan said. —JST, GMA News