PLDT eyes three countries for its cellular services

As part of its bid to become a global company, the Philippine Long Distance Telephone Co. (PLDT) is eyeing three other countries where it will offer its cellular phone services and operate it as a mobile virtual network operator (MVNO).

PLDT chairman Manuel V. Pangilinan said that Smart Communications Inc. in partnership with PLDT Global Corp. (PGC) will begin offering mobile phone services in Italy early next year under an MVNO arrangement with a  mobile network operator (MNO) based in the European country.

 An MVNO is a company that provides mobile phone service in another country but does not have its own radio frequency allocation, nor does it have all of the infrastructure required to provide mobile telephone service in the foreign country. Instead, MVNOs have business arrangements with traditional mobile operators to buy minutes of use for sale to their own customers or utilize the foreign operator’s infrastructure to offer the MVNO’s own brand or services under a profit-sharing agreement.

The arrangement allows PLDT to expand its presence and offer its mobile services worldwide without the accompanying huge investments. However, Pangilinan emphasized that this does not mean that PLDT or its parent company First Pacific of Hong Kong have abandoned plans of acquiring or investing in foreign telecommunications companies.

Smart and PLDT Global currently have two MVNO arrangements, one in Hong Kong and another in Singapore in partnership with CSL Limited and Mobile One, respectively.

Aside from Italy, Pangilinan said Smart may also begin offering its mobile phone services, particularly targeting overseas Filipino workers (OFWs) in Taiwan and Macau by 2009 also under an MVNO arrangement with a foreign mobile operator. Another one is being worked out, he added, but did not disclose in which country this will be.

There are currently around 360 planned or operational MVNOs worldwide, according to consultancy firm Takashi Mobile. Countries including Algeria, the Netherlands, France, Denmark, United Kingdom, Finland, Belgium, Australia, and the United States have the most MVNOs.

Successful MVNOs are those that position their operations so that customers do not distinguish any significant differences in service or network performance yet offer some special affinity to their customers. Unlike simple resellers, who often have little or no brand recognition, MVNOs are typically well known, well positioned companies, with a good deal of marketing clout.

The major benefit to traditional mobile operators cooperating with MVNOs is to broaden the customer base at a zero cost of acquisition.

PLDT Global Corp., the international sales and marketing arm of the PLDT Group, said the company’s international mobile business in partnership with local operators in Hong Kong and Singapore is becoming a more sustainable business model.

Singapore achieved positive results faster after only 10 months of commercial operation, amassing more than 35,000 customers in the first quarter of the year.

The company will now focus on the MVNO business model to tap the growing OFW communities in Asia, the United States and Europe.

PLDT Global has opened a shop in the Middle East, offering Smart Communications Inc.’s remittance service that uses the mobile-phone based financial services platform of the cellular firm.

The platform enables mobile operators and banks to serve the remittance needs of migrant populations in their respective countries. The Middle East’s telecommunications regulations do not allow MVNO arrangements.

PLDT Global launched its MVNO in Hong Kong in August 2004. It was branded as “1528 Smart,” in partnership with Hong Kong CSL Limited in April 2006.

Under an existing reseller agreement, PLDT Global offers mobile phone rates that are cheaper by as much as 50 percent compared to the rates of foreign networks. The market consists of the 180,000 OFWs in Hong Kong. 

PLDT Global launched another MVNO in partnership with Singapore’s third largest mobile operator Mobile One called “Smart Pinoy” to provide cellular services to over 130,000 Filipinos there.