Australia’s Telstra eager to compete in Philippine telco

MANILA, Philippines - Australia’s biggest telecommunications provider Telstra will invest nearly $1 billion in the country should it decide to pursue a partnership for a wireless business with San Miguel Corp. (SMC).

A transcript of Telstra’s Investor Day held in Australia sent to Philippine media cited company chief executive officer Andrew Penn as saying the company is looking to invest nearly $1 billion for the wireless business in the Philippines, if and when it proceeds with plans with SMC.

“Our estimate would be an investment from Telstra (which) would be less than $1 billion,” he said.

Telstra sees opportunity in investing in the Philippines as there are only two players in the telecommunications industry as opposed to six up to eight in other markets.

Given the “lousy” service from present telco players, Penn said there is also opportunity for Telstra to provide much better quality offerings in the country.

James Molan, group manager for communications for international and new businesses at Telstra, said in an email discussions with SMC for a possible joint venture on the wireless business in the Philippines are still ongoing.

“No deal has been reached and there is no certainty one will be reached,” he said.

Should Telstra pursue the joint venture with SMC, the Australian firm would hold a 40 percent stake given the Philippine Constitution’s foreign ownership limit.

“As a foreign investor in the Philippines, you are limited to a 40 percent shareholding, so this would be very much a partnership and our capital would be equivalent effectively to that shareholding and then also supplemented by external financing as well,” Penn said.

For now, he said Telstra is working with SMC in terms of design and network rollout in case the deal pushes through.

Telstra offers a wide range of services globally, with a focus on the Asia Pacific region.

SMC is engaged in the telecommunications business through the companies Eastern Telecommunications Philippines Inc., Bell Telecommunications Philippines Inc., Liberty Telecoms Holdings Inc. and Vega Telecom, Inc.