PLDT seeks to be a powerhouse in media-entertainment business

Telecommunications giant Philippine Long Distance Telephone Co. (PLDT) is going full blast with its plan to be a powerhouse in the media and entertainment industry, as it has lined up several areas of expansion in this field. 

Following its acquisition of a 30-percent stake in publishing company BusinessWorld, PLDT, through its subsidiary Mediaquest, is planning to start commercial operations of a direct-to-home satellite television business middle of next year, PLDT officials told The STAR. Mediaquest also has a minority stake in Central CATV which owns SkyCable and Home Cable.

PLDT neither confirmed nor denied reports that it has revived talks with Philippine Multimedia Systems Inc. (PMSI), a company owned by businessman Antonio O. Cojuangco which owns and operates DTH satellite TV service Dream Broadcasting, to acquire said DTH business, but said they are exploring various opportunities to expand the business, which will include DTH, IPTV (Internet television), and mobile TV.

PLDT has a joint venture agreement with US DTH giant Echostar to offer DTH services in the Philippines, and is in talks to acquire GV Broadcasting, a holder of a legislative franchise, to go into DTH. PLDT itself does not have the franchise to offer DTH and, therefore, needs to acquire an existing DTH licensee.

GV Broadcasting is a company partly owned by the group of Orlando Vea who eventually sold the firm to the First Pacific Group. Vea is now part of PLDT as president of Mediaquest, and according to PLDT officials, the acquisition of GV by PLDT will definitely push through and that only minor details are being worked out.

GV, however, has yet to secure a provisional authority from the National Telecommunications Commission (NTC) to engage in the DTH business. GV’s PA application is being opposed by PMSI.

PLDT officials also revealed that Mediaquest will be the vehicle used by PLDT in acquiring a television network. PLDT chairman Manuel Pangilinan has confirmed the group’s interest in acquiring government TV station RPN-9, whose privatization is facing delays. 

While the Privatization Management Office (PMO) said that it is targeting to sell both RPN-9 and IBC-13 before the end of the year, official sources said that the privatization plan at this point is still very sketchy. A PMO official said the situation is very "sensitive."

Aside from the opposition being faced by the government from stakeholders of the two TV stations – both from management and the employees – sources told The STAR that a decision has yet to be made on whether to sell the two stations as a block or separately. 

RPN-9 is expected to fetch a higher value than IBC 13 because the former has more assets, including land, while IBC’s value is more in its franchise. However, the stake in RPN-9 which government can freely sell is small (a large portion is still under sequestration) and it is highly doubted whether any buyer would be interested in a small stake in a company that owes so much. 

Meanwhile, PLDT denied reports (not The STAR) that foreign ownership of the company’s capital exceeds the constitutional limit of 40 percent and that foreigners control the board of PLDT.

Company officials stressed that foreign ownership of PLDT’s capital has always been and remains to be below 40 percent and foreign representation in the board of PLDT is in proportion to the percentage of foreign ownership of PLDT’s capital.

They pointed out that as of Aug. 31, 2006, only 122,693,774 shares or 13.7 percent of the 896,294,802 total subscribed shares of PLDT were owned by foreigners, with two foreign representations in the PLDT board.