Lopez named to PLDT advisory board

MANILA, Philippines - In a bid to “close the circle of cooperation” between two of the country’s most profitable companies, Philippine Long Distance Telephone Co. (PLDT) has named Manila Electric Co. (Meralco) chairman Manuel ‘Manolo’ Lopez to its advisory board as PLDT said it expects to close its investment in Meralco in a few weeks’ time.

Also named to the PLDT advisory board is former Supreme Court Chief Justice Artemio Panganiban, who also sits in Meralco’s board and another Lopez company as an independent director.

As handpicked members of the advisory board, Lopez and Panganiban can attend and participate in the meetings of PLDT’s elected board of directors, but cannot vote.

PLDT chairman Manuel V. Pangilinan revealed that one of the possible areas of synergy with Meralco is the offering of prepaid electricity service. “I know that Aboitiz is testing this among its customers in Cebu. We hope we can apply it here,” Pangilinan said at the sidelines of yesterday’s PLDT stockholders’ meeting.

“We are exploring opportunities in prepaid electricity, wireless bill payments, and meter reading using wireless telemetry. We also want to work with Meralco in areas as broadband over power lines, bill statement printing and enveloping for Meralco’s  4.6 million customers and our 2.1 million postpaid customers, and facilitation of easements and rights of way,” Pangilinan said.

Asked why Lopez was named to PLDT’s advisory board, Pangilinan said this helps promote cooperation between the two companies. “But we have agreed that any cooperation between PLDT and Meralco will have to be mutually beneficial,” he emphasized.

The PLDT group currently owns a 10.2-percent stake in Meralco via the PLDT Beneficial Trust Fund, the ownership of which will be transferred to Metro Pacific Investments Corp. (MPIC) very soon.  The PLDT BTF stake in Meralco was acquired from the open market.

PLDT wireless subsidiary Pilipino Telephone Inc.  (Piltel) is acquiring another 20 percent stake in Meralco from Lopez-owned First Philippine Holdings worth P20 billion.

Pangilinan said that most of the P20 billion will be from internally-generated funds while some will be sourced from loans. “The funding is already in place. We hope to close the deal soon,” he emphasized. The acquisition by Piltel will be presented to the shareholders for ratification at the Piltel shareholders’ meeting on June 30.

At the Meralco stockholders’ meeting last May 26, Pangilinan, PLDT president Napoleon Nazareno, and ePLDT president Ray Espinosa were elected to the power utility’s board.

In his speech, Pangilinan said the partnership between a telco and a power company is unprecedented anywhere in the world. “And it is a partnership that we at PLDT mean to show the world that yes, we can make it work,” he said.

He emphasized that this P20-billion investment can realize operational and business synergies between the two organizations, meaning new revenue streams and cost savings for both companies.

“PLDT and Meralco have compatible and complementary network and business infrastructure elements such as fiber optic backbones, power poles and business offices. E-Meralco Ventures operates a fiber optic network of over 1,000 kilometers in and around the National Capital Region and in six surrounding provinces, providing leased line services, metro Ethernet connections, and disaster recovery services. This could provide PLDT expanded network diversity. Backroom assets in data management and IT domain knowledge may also be pooled and maximized,” Pangilinan said.

As for PLDT’s financial prospects this year, Pangilinan said they expect a core income of P40 billion compared with P38 billion last year.

For the first four months of 2009, the PLDT top official revealed that revenues, core profits and subscriber numbers are all up compared to the same period last year.

Meanwhile, elected to the PLDT board yesterday are Pangilinan, Nazareno, Espinosa, Tatsu Kono and Takashi Ooi representing Japan’s NTT, Helen Dee, Tony Tan Caktiong, Donald Dee and Alberto del Rosario. The independent directors include Benny Santoso, Pedro Roxas, Oscar Reyes and Alfred Ty.