PLDT eyes strong presence in media, entertainment

After dominating the telecommunications sector for decades, industry giant Philippine Long Distance Telephone Co. (PLDT) now wants to be a powerhouse in the media and entertainment industry.

PLDT chairman Manuel V. Pangilinan revealed that the group has revived its interest in setting up a direct-to-home (DTH) satellite television business, possibly through newly acquired 360media Corp. (formerly GV Broadcasting). Mediaquest, a wholly owned subsidiary of the PLDT Beneficial Trust Fund, owns 360media.

“We will undertake a review of the DTH business early next year. This will include the price of equipment, uplink, downlink, set-top boxes. The economics might have changed,” he said.

It will be recalled that PLDT earlier entered into a joint venture agreement with US DTH giant Echostar to offer DTH services in the Philippines. But because PLDT itself did not have a franchise to offer DTH, it needed to acquire an existing local DTH franchise holder and subsequently entered into talks with GV Broadcasting to acquire the latter.

The agreement with Echostar, however, expired even before the plan to set up a DTH company could take off. There were reportedly disagreements between PLDT and Echostar mostly on technical matters, so that the agreement was no longer renewed.

With PLDT now owning 360media (GV Broadcasting), Pangilinan said PLDT can enter into the DTH business by itself even without a partnership with Echostar.

Talks between Philippine Multimedia Systems Inc. (PMSI), a company owned by businessman Antonio O. Cojuangco which owns and operates DTH satellite TV service Dream Broadcasting, and PLDT to acquire Dream have also fizzled out.

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.

There are also reports that the PLDT Group has made an offer to acquire government’s stake in RPN-9 and that the deal will be sealed next year. PLDT officials revealed that Mediaquest will be the vehicle to used by PLDT in acquiring the TV network.

 Pangilinan earlier confirmed the group’s interest in acquiring RPN-9, whose privatization is facing delays. He would not, however, confirm whether a deal had indeed been sealed with government.

The Privatization Management Office (PMO) was earlier targetting to sell both RPN-9 and IBC-13 before last year

However, a PMO official said the situation is very “sensitive.” Aside from the opposition being faced by the government from stakeholders of the two television stations — both from management and the employees, sources said 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).

PLDT’s foray into the media and entertainment business began when wireless subsidiary Smart Communications Inc. together with 360media launched the country’s first commercial mobile television service, branded myTV.

360media has a congressional franchise that allows it to provide broadcast services and a direct-to-user license that permits it to broadcast via satellite and terrestrial wireless transmission mobile TV and direct-to-home (DTH) satellite TV services.

Mediaquest, on the other hand, has interests in various media-related ventures, including a controlling interest in Nation Broadcasting Corp. which operates a network of radio stations, a minority interest in Central CATV which owns SkyCable and Home Cable, and a 30-percent interest in a newspaper company.

In a recent report, research firm Informa Telecoms and Media forecast that worldwide revenues from mobile TV and video services will rise from $2.46 billion in 2006 to $8.35 billion in 2011. A study by IMS Research said nearly half a billion people will be watching TV on their mobile phones by the end of 2011.

Around $50 million is expected to be spent by Mediaquest for mobile TV over a three-year period of which around $30 million has already been spent. But this investment is on top of whatever investments Smart has already put into for the servicing and billing side, among others.

The service is being broadcast using the mobile TV platform called digital video broadcasting-handheld or DVB-H.