SMC, Telstra in talks for potential telco venture

MANILA, Philippines - Telstra Corp., Australia’s biggest phone company, and San Miguel Corp. (SMC), the diversified conglomerate, are in talks for a possible wireless joint venture in the Philippines.

In a filing with the Australian Stock Exchange, Telstra said talks are ongoing but nothing is final yet.

“We are in discussions in related to these matters. However, no agreements have been reached in relation to these matters and there is no certainly that this will occur,” said Telstra corporate secretary Damien Coleman.

“We note recent speculation concerning Telstra considering an investment in a wireless joint venture in the Philippines with San Miguel Corp. and that financing is being sought in relation to that joint venture,” the company said.

Melbourne-based Telstra is also reportedly selecting banks to help fund its expansion projects.

San Miguel president Ramon Ang said in July there was a need to break the duopoly in the Philippine telecommunications sector.

He said there should be a “third player” in the country so subscribers would have more options.

Also last month, SMC consolidated its telecom units into Vega Telecom Inc.

Vega Telecom made a tender offer for shares in affiliate Liberty Telecoms Holdings Inc.

In its tender offer report to the Philippine Stock Exchange, SMC said

Vega acquired up to 223.155 million common shares held by public shareholders of Liberty Telecoms.  The shares represent about 17.25 percent of the total issued and outstanding common stock of Liberty Telecoms.

The tender offer comes amid Vega’s acquisition of 51 percent of the total issued and outstanding capital stock of Liberty Telecoms.

Vega also earlier entered into share purchase agreements to acquire a total of 3.33 billion common and preferred shares of Liberty Telecoms from sellers Qtel West Bay Holdings S.P.C., Wi-tribe Asia Ltd. and White Dawn Solution Holdings.

Coming from a recent corporate rehabilitation program, Liberty Telecoms plans to launch various services in the telecommunications industry.

It was in 2005 when Liberty Telecoms decided to go through a corporate rehabilitation program after it suspended operations that year.  This was due to lack of capital to operate and continue its business.

SMC also earlier disclosed that Vega also recently acquired Express Telecommunications Inc. and invested in another telecommunications firm, High Frequency Telecommunications Inc.

Apart from Vega and LTHI, SMC is engaged in the telecommunications business through Eastern Telecommunications Philippines Inc. and Bell Telecommunications Philippines Inc.