PLDT-DIGITEL MERGER Exec: Customers to gain from combined services

“We combine each of our strengths and use it to benefit our customers.” Napoleon L. Nazareno, Philippine Long Distrance and Telephone Co. (PLDT) and Smart Communications, Inc. president and chief executive officer, said this would be the plan of PLDT and Digitel Telecommunications Philippines Inc. after the share-swap deal between the two firms was approved last Oct. 26. The National Telecommunications Commission (NTC) approved the share-swap deal between PLDT and JG Summit Holding, which owns Digitel Telecommunications Inc., after PLDT agreed to divest its ownership in CURE or Red Mobile along with the 10 megaHertz (MHz) of 3G frequency in the 2100 band. Nazareno assured that what the firm lost was gained through the share-swap deal with Digitel. “We let go of the 10MHz but we also gained that in Sun Cellular in the same bandwidth so there will be no service interruptions we expect from that,” Nazareno said during the press conference held in Manila for PLDT’s third quarter financial and operating results, which was also fed live in Cebu via teleconference at the PLDT Innolab in Mabolo, Cebu City. He also said that they still had the remaining 25 MHZ frequency that they could use to enhance services along their brands, which now include Sun Cellular. He said the firm would study more opportunities for services with the new developments within the 15 month transition period for the share-swap deal. “The direction in towards synergy and convergence, we will be using each of our brands’ strengths to complement each other and move forward as one,” he said. He cited as example the Luzon fixed-line subscribers of Digitel, who would immediately enjoy DSL services because PLDT was already offering these services in the area. “That’s how we plan to move forward. We combine the strengths of each and use it to benefit the customers,” Nazareno said. He said Sun Cellular would remain as a separate entity while CURE’s about 1.6 million subscribers would immediately be transferred under SMART. Nazareno said that they were still studying how they would roll out the combined services. He also assured that the Sun Cellular subscribers would continue to enjoy the “unlimited” types of services Nazareno said in the firm’s consolidate report, PLDT’s net income dropped by 4 percent on the third quarter this year ending with only P30.6 billion compared to P32 billion in the same period last year. “Core net income for the first nine months of 2011 declined by 3 percent from P31.4 billion last year partly because of the stronger peso. Had it remained stable, core net income would have been higher by P700 million or substantially similar with last year,” Nazareno said. Nazareno noted that the revenue mix had changed with traditional businesses being gradually replaced by new revenue streams like mobile Internet using smart phones. “We have about 5 million mobile subscribers, 3 million of that are now using smart phones and are into mobile Internet while the remaining 2 million still use 3G capable phones, “said Smart head for public affairs Ramon R. Isberto. “We’d like to facilitate the migration of these 2 million subscribers into smart phones through the introduction of more attractive products and offering cheaper smart phones though our Netphone lines,” Isberto said.