Express Telecom eyes tie-up with BayanTel

In an attempt to increase its eroding subscriber base, analog mobile phone provider Express Telecommunications Co. is set to enter into a partnership with its major stockholder Bayan Telecommunications Inc. (BayanTel) which was recently granted a provisional authority (PA) to operate a digital cellular phone network.

Advinculo "Benny" Quiblat Jr., express Telecom president and chief executive officer, said during the Telecomex Asia 2000 exhibit yesterday that shareholders of the company are already discussing several options which include a possible functional merger.

"Nothing has been finalized but there are lost of scenarios that we're looking at. Right now, we cannot compete (on the high-end market) so we need to introduce digital services to have a fighting chance. Perhaps when BayanTel starts its GSM (global system from mobile communications) service, we can," he said.

BayanTel, he said, is expected to complete rolling out its mobile phone infrastructure within a year as mandated under its PA even as the National Telecommunications Commission (NTC) has yet to award it a radio frequency on the 1800 Megahertz band.

BayanTel is asking for 10 MHz but the NTC is only likely to give it an initial 7.5 MHz.

The Lopez-owned firm owns 46.6 percent of Express Telecom but has been complaining of heavy losses amounting to over P6 billion due to the latter's inability to effectively compete with other industry players, a situation which it has attributed to the tight rein of Millicom Asia over the beleaguered firm.

Millicom only controls 40 percent of Express Telecom but it is working closely with another shareholder, GMA Networks which holds the rest of the shares, thereby, effectively leaving BayanTel out in management decisions.

Quiblat, though, noted that since BayanTel also owns Express Telecom, there will definitely be synergies between the cellular phone businesses of the two companies.

"At the right time, we will (go GSM). Afterall they (BayanTel) are our shareholders," he said.

He admitted that a present, Express Telecom can only focus on low-end customers which merely need basic telephones since it does not have the capability to offer value-added services, being an analog phone provider.

Due to its predicament, Quiblat said Express Telecom's subscriber base has relatively remained flat at 200,000.

While there are net additions of about 10 percent monthly, he said their high-end customers are moving over to GSM.

Quiblat stressed, however, that the company has no plans of abandoning its analog network since it has still a big market especially in the provinces where telephone penetration remains very low.