BayanTel eyes Verizon as strategic partner

Lopez-owned Bayan Telecommunications Inc. (BayanTel) is seriously considering American company Verizon Communications Inc. as its strategic partner that will put in either new money and/or technological expertise in a still-to-be-formed mobile phone service business.

BayanTel chief finance officer Gary Olivar said in an interview yesterday that although it is too early to firm up plans for its impending mobile phone service, the company is "more or less keeping its options open. The ideal situation would be is to set up a subsidiary," Olivar said.

The Supreme Court recently reversed a lower court ruling that prevented BayanTel from using its provisional authority to engage in the cellular mobile telephone service (CMTS) business which is currently dominated by Globe Telecom and Smart Communications.

Formerly Bell Atlantic, Verizon has a 19-percent stake in BayanTel Holdings which owns BayanTel Inc. currently the fixed telephone business. Benpres Holdings Corp. of the Lopez group has a 66-percent stake in BayanTel while Asian Infrastructure Fund holds eight percent and the remaining seven percent by institutional investors.

Aside from Verizon, Olivar said there are several other foreign investors that BayanTel could consider. "I personally have been receiving various offers from interested foreign investors. There are several of them, including Verizon," he said.

Preliminary discussion with Verizon have began, according to Olivar. Although he stressed that nothing has been finalized yet, he said "we are taking with existing representatives with Verizon on this."

Having Verizon as its foreign partner would give BayanTel an edge over other existing players in the cellular market considering Verizon’s joint venture with Vodafone, the largest mobile telecommunications network company in the world.

By market capitalization, Vodafone is the largest company in Europe. "Verizon is the number one mobile phone firm in the US. It used to be Bell Atlantic which is our partner in our fixed line. Its tie up with Vodafone shows its strength," Olivar said.

BayanTel, he said, has not taken out Norwegian firm Telenor from the list of prospective partners. It will be recalled that the memorandum of understanding (MOU) signed with Telenor had lapsed last year just months after BayanTel’s license was reinstated by the Supreme Court last month. BayanTel has not contacted Telenor since.

The first division of the SC lifted the permanent injunction issued by the Court of Appeals and reinstated the order of the National Telecommunications Commission (NTC) allowing it to engage in the cellular business. BayanTel’s provisional authority (PA) to construct, install, operate and maintain a nationwide CMTS was questioned by its sister firm Express, Telecom, which claimed that the NTC tailored-fit the license it issued on May 3, 2000.

Extelcom had filed a motion for reconsideration last Thursday at the SC. "We are not ruling out resumption of talks with Telenor. We have not contacted them yet though," Olivar said.