PT&T and TransCo confirm interest in China Telecom’s Philippines venture

PT&T and TransCo confirm interest in China Telecom’s Philippines venture

Philippine Telegraph & Telephone (PT&T) and state-run National Transmission Corp (TransCo) have expressed interest in partnering with China Telecom when it enters the country’s mobile market.

PLDT and Globe Telecom have long held an effective duopoly in the Philippines, and a third player has long been desired to introduce greater competition and spur an improvement in services. Each operator has a market share of around 50%.

President Rodrigo Duterte has hit out at the poor connection speeds offered by the two incumbents and has made good on a threat to invite investment from China. The government recently announced that China Telecom would become the market’s third player.

TransCo owns transmission assets that connect the many of the Philippines’ power plants to the utilities that distribute electricity. In 2016, it requested that the country’s congress update its charter so that it could move into the telecoms industry.

Its electrical facilities would make it a potentially attractive partner for China Telecom, and the fact that it is state operated would allow it to become the majority holder in a joint venture. Public utilities in the Philippines are only permitted 40% overseas ownership.

TransCo president Melvin Matibag noted that the firm’s assets would dovetail well with China Telecom’s technical and operating knowledge, adding that this would enable the firms to “shorten the process” of establishing an operator should a partnership be forthcoming. He confirmed that no talks have yet been held on the matter.

PT&T meanwhile is in active negotiations with eight firms, according to chairman Salvador Zamora. In October, the firm raised the possibility of forming a partnership with an overseas investor to regain its position in the Philippines’ telecoms market. The company was founded in the 1960s but has no significant foothold in the country’s mobile space.

Zamora confirmed PT&T’s stated goal of partnering with a Chinese operator, as well as affirming that the firm is aiming to agree a deal by the end of 2017. The company has announced that it intends to launch a nationwide broadband service within the next three years.

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