SMC’s Liberty Telecoms to pursue mobile business

MANILA, Philippines - Diversified conglomerate San Miguel Corp. (SMC) is still pursuing plans to launch various services in the telecommunication industry despite the dominance of major players led by Philippine Long Distance Telephone Co. (PLDT) and Ayala-led Globe Telecom Inc.

SMC president and chief operating officer Ramon S. Ang told reporters yesterday after the annual stockholders’ meeting of Liberty Telecoms Holdings Inc. that the country’s telecommunication industry remains attractive with higher earnings and return on investments.

Ang, who is also chairman of Liberty Telecoms, said the earnings before income tax, depreciation, and amortization (EBITDA) of telecom providers remains high.

“It is still high,” he said.

For one, he explained that telecom providers are looking at growing the share of mobile broadband in the total revenues to about five percent from the current level of three percent.

According to Ang, Liberty Telecoms intends to venture into the mobile business to provide voice calls, short messaging system (SMS) or text messaging as well as mobile broadband.

“Liberty needs a bigger plan for us to make this successful and viable. We will come up with a business plan that will be able to serve the public better,” he said.

The SMC chief refused to divulge details of the expansion plans of Liberty Telecoms.

Amid the planned diversification, Ang believes that the company would not make money over the next few years.

“Liberty Telecoms will not make money in the next year or so,” he added.

Liberty Telecoms was placed under corporate rehabilitation and debt restructuring after it suspended its operations in April 2005 due to lack of capital required to operate.

Four months after the suspension of operations, the company filed a petition for corporate rehabilitation before the Makati regional trial court that approved a revised rehabilitation plan in December of 2006.

Ang said the company is sticking to the original schedule of getting out of rehabilitation in 2016.

The telecom industry in the country is dominated by PLDT with 70.5 million subscribers for Smart Communications Inc., Talk N’ Text, and Sun Cellular while Globe has over 40 million subscribers as of end March.

Liberty Telecoms is a joint venture between SMC and Qatar Telecom. Its wholly-owned subsidiaries include wi-tribe Telecoms Inc. and Skyphone Logistics Inc.

wi-Tribe was granted an extension of its congressional franchise until 2037 last Sept. 21 allowing it to provide various types of domestic and international communication service to the public. It launched 4G broadband services using wi-tribe brand last 2010.

Last October, Liberty Telecoms infused P7.6 billion into its wholly-owned subsidiary wi-Tribe Telecoms Inc. through a debt to equity conversion.

Last July, Liberty Telecoms extended by one year the guarantee on the P1.1 billion loan obtained wi-Tribe from the state-run Trade and Investment Development Corp. of the Philippines (TIDCORP).

The guarantee is in connection with the loan amounting to P1.1 billion obtained by wi-Tribe from Bank of Commerce under the guarantee of TIDCORP.

It would be recalled that wi-Tribe Telecoms borrowed P1.1 billion from Bank of Commerce to bankroll the expansion of its fourth generation (4G) network outside Metro Manila.

Ang reiterated yesterday that SMC is not abandoning its telecommunications business.