PLDT extends union with Rocket Internet

MANILA, Philippines - Dominant carrier Philippine Long Distance Telephone Co. (PLDT) through wireless arm Smart Communications Inc. is initially investing P1.54 billion for a 33.3 percent stake in a joint venture company with Berlin-based Rocket Internet AG.

PLDT president and chief executive officer Napoleon Nazareno said the PLDT Group is extending its partnership with Rocket Internet to further improve the country’s Internet infrastructure.

“At PLDT, we are firmly committed to paving the way for the country’s digital future. We have already built the Philippines’ most extensive Internet infrastructure,” Nazareno said.

PLDT through Smart’s wholly-owned subsidiary Through Voyager Innovations Inc. is investing P1.54 billion or 30 million euros for a 33.3 percent stake in a joint venture focusing on online business development in the Philippines.

On the other hand, Asia Pacific Internet Group – 50 percent owned by Rocket Internet – would have a 66.7 percent in the new joint venture company to be called Philippine Internet Group.

The unit of Smart has an option to increase its stake to 50 percent in the new online enterprise that would bundle activities of existing high-growth companies and numerous models to be launched in the coming years

“Now we are excited to extend our partnership with Rocket Internet and look forward to harnessing their knowledge and experience in building innovative internet services that will further support our mission of enriching our people’s lives,” Nazareno said.

Following the successful model of Rocket’s four existing regional Internet groups, PHIG would leverage local market and business model insights, facilitate commercial, strategic and investment partnerships, enable local recruiting and sourcing and accelerate the rollout of online startups.

It will drive the activities of high-growth companies that are already operating in the Philippines like Lamudi, Carmudi, Clickbus and Pricepanda, and aims to launch numerous new companies in the coming quarters.

For PLDT, this marks a milestone in its strategy to increasingly invest in businesses that provide digital growth opportunities and develop new revenue streams. This is supported by increasing disposable income and internet penetration – key drivers for eCommerce growth – in the Philippines where a vast majority of mobile subscribers are tech-savvy and open to alternative payment systems for their daily purchases.

 “With a population of about 100 million people and more than 44 million Internet users, the Philippines is a highly promising market. We are glad that with PLDT, the Philippines’ number one telecom operator, we have a strong investor on board with deep local expertise and the infrastructure to best serve customer needs,” Rocket Internet founder and CEO Oliver Samwer.

“Our strategic partnership will accelerate the development of the Philippines Internet Group as the country’s leading online powerhouse and help our businesses succeed,” Samwer said.

The PLDT Group made its biggest foreign investment when it spent 333 million euro to acquire a 10 percent stake in Rocket Internet last Aug. 7. The stake of PLDT in Rocket Internet was diluted to 6.6 percent after the German firm went public but the value of the investments has gone up to 419 million euro.