Sun to continue unlimited services

MANILA, Philippines - Sun Cellular will continue to offer unlimited mobile voice and text messaging services even after Philippine Long Distance Telephone Co. (PLDT) completes its investment in Digitel Inc., Sun’s parent company, PLDT president and CEO Napoleon Nazareno said yesterday.

“Our intention is to maintain Sun’s current offers and further improve them. One clear opportunity is mobile broadband. Leveraging the combined networks of PLDT, Smart and Sun, we plan to expand the reach and raise the quality of mobile broadband services for Sun subscribers. This is in line with our Internet for All advocacy,” Nazareno explained.

Some quarters had raised concerns that PLDT’s investment into Digitel would lead to the end of Sun’s unlimited offers.

“That’s not going to happen. There is a market for unli services and we intend to be the best in serving that market,” Nazareno said.

Nazareno, who is also president of PLDT wholly owned mobile subsidiary Smart Communications Inc., said that over the next three months, they shall study further Digitel’s operations and networks to enable them to draw up specific plans in order to realize the synergies between PLDT, Smart and Digitel.

PLDT group chairman Manuel V. Pangilinan revealed that Digitel will be a subsidiary of PLDT instead of being absorbed by Smart. “For the meantime, each will operate on its own. We intend to maintain Digitel and its mobile subsidiary Digitel Mobile Philippines Inc. as separate corporations. Their respective organizations and businesses will remain as they are. Their brand equity will be maintained,” he emphasized, adding that Smart Buddy, Talk ‘N Text, and Sun Cellular are all strong brands.

Earlier this week, top officials of PLDT and Gokongwei holding company JG Summit signed an agreement under which PLDT will acquire JG Summit’s shareholdings and other economic interests in Digitel for the sum of P69.2 billion.

PLDT will also undertake a mandatory tender offer for the remaining common shares of Digitel held by minority shareholders. This could raise the total transaction price up to P74.1 billion.

Payment would be done in the form of PLDT shares valued at P2,500 each.

To complete the transaction, PLDT needs to obtain regulatory as well as shareholder approvals in a process that it hopes to finish in the next three months.

Pangilinan said that once the transaction is closed hopefully by June 30 this year, then PLDT will reassess the capital expenditure spend of the group taken as a whole.

Last March 1, he announced that about P34 billion will be spent by the PLDT group for capex this year and another P33 billion in 2012. The level will settle down starting 2013 to the amount previous to 2011, or about 18 to 20 percent of service revenues. In 2010, capex totaled P28.8 billion

Of total capex spend for this year, about P15 billion will be for technical initiatives while P14 billion will be for the commercial aspect. In 2010, about 17 billion was spent for the wireless and P11.1 billion for the fixed line business.

The PLDT group ended 2010 with 45.6 million cellular phone service subscribers, of which Smart Buddy accounts for 25.3 million, Talk ‘N Text 19 million, and Red Mobile 954,000 subscribers.

Meanwhile, according to Digitel president James Go, who is also chairman and CEO of JG Summit, Sun Cellular had slightly over 14 million mobile phone service subscribers as of end-December last year.

In terms of broadband subscribers, Nazareno said the PLDT group has a total of over two million as of end 2010 or a 60 percent market share. Go said Digitel has 500,000 broadband subscribers for both fixed DSL and wireless.

But aside from the stronger subscriber base, Nazareno pointed out that the rationale for the acquisition includes optimized network management, the acceleration of roll-ut of new technologies (4G/LTE) for the combined network, leveraging of Sun’s operations to effectively improve “unli” services for subscribers of both companies, benefits that will be derived by Digitel’s fixed line subscribers from PLDT’s infrastructure, and faster rollout of enhanced broadband services to Digitel’s wireline customers.