PLDT acquires Sun Cellular, Globe showdown inevitable?

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This is major – PLDT has just confirmed it’s buying a majority stake in the Gokongwei-owned Digitel Telecommunications Philippines Inc.(DTPI), which operates one of its competitors, Sun Cellular. The telecom behemoth will acquire a 51.5% stake in Digitel, which amounts to Php 69.2 billion, with the payment being made through an offering of PLDT shares at Php 2,500 a piece under the name of DTPI parent JG Summit Holdings Inc. In exchange, James L. Go, chairman and CEO of JG Summit Holdings, will occupy a board seat in PLDT.

PLDT plans to keep Sun intact, which gives the company a trifecta of cellular operations – Smart, Red Mobile and now, Sun. In response to reactions that PLDT is poised to create a monopoly when it comes to the telco market, Napoleon Nazareno, president and CEO of PLDT and Smart said that “We expect competition to remain very robust given other operators are formidable and well-founded,” he said. “We would also have to face growing competition from so-called over-the-top service providers, those that offer social networking, instant messaging and VoIP services,” he added.

So that leaves two Telcos left in the game. Globe has issued an official reaction to the news via a press release. Mr. Ernest L. Cu, Globe President and CEO, said “The Digitel and PLDT merger will not fundamentally change our strategy.  We stand ready to compete, and to defend and grow our market share. This industry has always been intensely competitive, and we have been a strong challenger to a dominant incumbent all this time. We will continue to focus on delivering relevant products to our retail and corporate customers, providing differentiated customer service, and enhancing our network to deliver the best experience possible to our subscribers”, said Mr. Cu.

One thing’s for sure, the months ahead will sure be interesting for Globe.

Source: GMANews.TV