ABS-CBN to discontinue Bayan wireless landline service

MANILA, Philippines - A unit of Lopez-owned ABS-CBN Corp. is discontinuing its wireless landline telephone service starting next month.

In an announcement, ABS-CBN Convergence said Bayan Telecommunication Inc. (Bayantel) bayanPHONE Extra product would be discontinued effective May 16 and would be replaced by ABS-CBNmobile products depending on existing subscription and service area.

“This is part of our effort to offer you the best services possible as technology evolves. Because a new platform will be used, the shift to ABS-CBNmobile products will require a change in phone numbers,” the company said in the announcement.

In 2011, Bayan Communications Inc. sold its wireless landline service with about 100,000 subscribers to ABS-CBN Convergence (formerly Multimedia Telephony Inc.).

ABS-CBN Convergence is ABS-CBN’s mobile telecommunications subsidiary and operates ABS-CBNmobile.

Ayala-led Globe Telecom Inc. has partnered with Bayantel to launch ABS-CBNmobile. It was launched immediately after Super Typhoon Yolanda battered provinces in the Visayas last Nov. 8.

“We encourage you to try the new ABS-CBNmobile and experience nationwide coverage, stronger signal for better quality and reliability, and mobile internet surfing,” Bayantel said in the announcement.

When used with the latest smartphones and tablets, the ABS-CBNmobile SIM allows subscribers to watch their favorite Kapamilya shows anytime and anywhere through iWant TV mobile app or site

Ayala-led Globe Telecom Inc. expects the National Telecommunications Commission (NTC) to approve the amended rehabilitation plan of cash-strapped Bayantel this quarter paving the way for the takeover of a majority stake in the Lopez-owned company.

The approval of the revised rehabilitation plan of Bayantel would allow Globe to further raise its stake to about 57 percent from the existing 38 percent.

In May last year, Globe and the Lopez Group asked the rehabilitation court to restructure Bayantel’s $423.3 million debt to prevent default.

Bayantel’s outstanding debt stood at $497 million when it was placed under corporate rehabilitation in 2004. It has reportedly settled a total of P8.19 billion since it filed for supervised rehabilitation proceedings under the Pasig Regional Trial Court and intends to pay its $325 million outstanding debt within 2023.

In September, the Pasig RTC that has jurisdiction over the corporate rehabilitation of Bayantel confirmed the motion to amend the rehabilitation plan of the cash-strapped company in order to avoid the recurrence of default and ensure its continued viability.

The approved rehabilitation plan seeks to significantly reduce the debt burden of Bayantel through a conversion of up to 69 percent of the debt into equity

Applicable to all creditors of Bayantel, the conversion aims to reduce the outstanding debt of Bayantel to around $131 million in two separate tranches of conversion and would result to Globe ownership of up to 57 percent of Bayantel.

The first tranche of conversion was completed in October wherein Bayantel issued common shares equivalent to a 39 percent equity stake in the cash-strapped company to Globe.

Discussions are ongoing for the remaining stake of the Lopezes that would likely be reduced to a little over 40 percent after the debt to equity transaction.

By acquiring the Bayantel debt, Globe sought to enable Bayantel’s continued viability as a telecommunications provider.  Such a restructuring would allow Globe to further strengthen collaborative efforts with Bayantel in respect of their local exchange networks, corporate data and broadband businesses.