PLDT, NTT to revive talks after foreign ownership issue is resolved

Telecommunications giant Philippine Long Distance Telephone Co. (PLDT) wants all issues being raised regarding the extent of its foreign ownership resolved first before reviving talks with the Japan NTT group over a possible acquisition by the latter of additional shares in PLDT.

Nonetheless, PLDT chairman Manuel Pangilinan said they are open to discussions with NTT, the second largest foreign stakeholder in PLDT, on the possibility of increasing NTT’s stake in the local telecommunications company.

Earlier, lawyer Wilson Gamboa questioned in court the sale by government of its 46 percent stake in the Philippine Telecommunications Investment Corp. (PTIC) for P25.2 billion, increasing FPC’s stake in PTIC to 100 percent. The acquisition also raised First Pacific’s economic interest to 27.93 percent of PLDT’s outstanding common stock. 

PTIC is a single purpose holding company, holding shares representing approximately 13.8 percent of PLDT’s issued common share capital. The 46 percent government stake represents around 6.4 percent ownership in PLDT.

One of the issues raised by Gamboa involves the extent of foreign equity in PLDT, which he said has exceeded the 40-percent ceiling under the Philippine Constitution for a telecommunications company. 

Pangilinan explained that while they are confident that foreign ownership in PLDT remains below the constitutional limit, PLDT just wants any doubts being raised about the extent of foreign ownership in the telco resolved first before allowing the Japanese group to increase its shareholdings in PLDT. 

The NTT group, through its mobile phone subsidiary NTT DoCoMo, wants to increase its stake in PLDT from the current 13.4 percent to 20 percent.

The target for a 20-percent holding in the company is a “guideline” that reflects DoCoMo’s assessment of the Philippines as an “important” market for roaming services, spokeswoman Tomoko Tsuda earlier said. 

NTT DoCoMo, the world’s second-largest mobile phone operator, owns 6.7 percent of PLDT while its sister company NTT Communications Corp. holds another 6.7 percent. The NTT Group is limited by an agreement with First Pacific, which controls 27.93 percent of PLDT, not to own more than 20 percent of PLDT.

Based on current prices, an additional 6.6 percent stake in PLDT would cost NTT around more than P30 billion. 

Originally, FPC was supposed to partner with NTT DocoMo to acquire the 46 percent government share in PTIC, but the Japanese company backed out due to “pricing issues.” FPC and NTT were supposed to contribute around P13 billion each.

A plan for NTT to acquire part of PLDT’s stake in PTIC likewise fizzled out. According to Pangilinan, the Japanese conglomerate was not interested in acquiring PTIC shares. Instead, what it wants is to acquire more PLDT shares, he said.