Sky Cable acquires Destiny in P3.5-B deal

MANILA, Philippines - Lopez-owned Sky Cable Corp. has acquired the cable television business of rival Destiny Cable Inc. (DCI) and Uni-Cable TV Inc. (UNI) as well as the broadband Internet assets and subscribers of Solid Broadband Corp. (SBC) for a total cost of P3.5 billion.

Sky Cable is owned by ABS-CBN Corp. while SBC is a wholly-owned subsidiary of publicly listed Solid Group Inc. (SGI). DCI, which mainly operates in Metro Manila, and UNI, which operates a cable TV business in Cebu, are owned by other companies held by the controlling Lim family of SGI.

A few years back, Sky also acquired the assets of Home Cable from the PLDT Group which now operates the country’s largest direct-to- home (DTH) satellite tv and second biggest pay TV company Cignal.

The agreement, signed between ABS-CBN chairman Eugenio Lopez III and Solid Corp. president David Lim, will cement Sky’s position as the dominant cable TV (CATV) service provider in the country. Sky has around 500,000 CATV subscribers nationwide while Destiny has 200,000.

Sky chief operating officer Rodrigo Montinola told The STAR that they will next seek approval by the National Telecommunications Commission (NTC) of the asset purchase.

Officials said the deal, which will allow Sky to use the Destiny cable TV and MyDestiny broadband Internet brands, aims to further improve the services provided to Destiny and MyDestiny subscribers. The agreement entails the sale of the cable TV and broadband Internet assets and subscribers of DCI, SBC and UNI to Sky.

Lim, president of DCI, SBC and UNI, said the pay TV and broadband markets require continuous significant investments,” if we are to keep up with our major competitors, particularly the direct-to-home satellite (DTH) and telco companies.”

“We are gratified by the loyalty of our Destiny Cable subscribers and MyDestiny broadband subscribers all these years, and would always want to give them the best products and services possible. However, we realized that this will entail resources, for digitizing our cable network and expanding our broadband services, that we do not have. We believe our agreement with Sky will allow subscribers to enjoy the benefits of the latest technologies,” Lim explained.

Lim added that the tie up with Sky came at an opportune time as it allows the Solid Group to focus on its other core businesses. Holding company SGI markets and distributes Filipino mobile phone brand MyPhone.

In an interview with The STAR, Lim said the deal allows Sky to use the Destiny brands although the franchise to operate will remain with the three companies.

He revealed that about P1 billion of the acquisition price will be for the broadband business while the rest will be for the two CATV businesses.

Lim told The STAR that proceeds of the sale will allow the group to go into value-added services and enhance their core mobile phone business.

Meanwhile, Montinola pointed out that the agreement gives them the opportunity to extend the unique advantages of the digital cable TV and cable broadband Internet platforms to Destiny and MyDestiny subscribers.

He told The STAR that with the purchase, Sky will be able to expand its digitization agenda. About 100 percent of Sky’s franchise area is already digital-ready while around 91 to 92 percent of the subscribers have shifted from analog to digital CATV.

“As we plan these out, we will take extra care not to disrupt the existing services of the current subscribers - they will continue to pay same monthly fees for their subscribed plans, at the same payment centers, and can continue to reach customer service at the same numbers. We will make announcements on new services to be made available, at the appropriate time,” he said.

Montinola said in an interview that one of the reasons for the asset purchase is to attain economies of scale. “In broadband we entered the business late. We feel that if we have ths scale then we will be in a better position to compete,” he said.

Sky has around 40,00 broadband Internet subscribers while MyDestiny has 6,000.