SMC snaps up Extelcom; moves to buy out Liberty Telecom partner Ooredoo

15 Jul 2015

Diversified Filipino conglomerate San Miguel Corp (SMC) has acquired local telecommunications company Express Telecommunications (Extelcom) from a group owned by the investment banker Roberto Ongpin and UK-based Ashmore Investment Management, further shoring up its position in the domestic market. In a filing to the Philippine Stock Exchange, SMC confirmed that its 100%-owned Vega Telecom unit has purchased Extelcom – the country’s first mobile phone operator – and consolidated Vega’s investment in High Frequency Telecommunications Inc. As a result, the conglomerate now controls four telecoms operators, Extelcom, Eastern Telecommunications Philippines (formerly ETPI), Bell Telecommunications (BellTel) and Wi-Tribe (Liberty Telecoms Holdings).

Further, SMC says that Vega Telecom also intends to acquire the ‘entire interest and participation of Qtel West Bay Holdings, Wi-Tribe Asia Limited and White Dawn Solution Holdings’ in Liberty Telecom Holdings. In November 2010 SMC upped its stake in Liberty Telecom to 41.48%, while Ooredoo acquired a 27.12% stake in Wi-Tribe through the conversion of its loans to the telco into equity in 2009, and it subsequently upped its interest to 32.70% in October 2010, via its 100%-owned subsidiary Wi-Tribe Asia Limited, boosting this again to around 40% by December 2014. Going forward, SMC intends to hold a tender offer for the common shares of Liberty Telecoms held by the public in compliance with the country’s Securities Regulation Code. ‘The purchase of the shares of the sellers by Vega shall be subject to closing conditions, inclusive of the completion of the tender offer,’ it said.

SMC’s commitment to the Filipino market is clear, and with Liberty recently exited from corporate rehabilitation ahead of a planned launch of mobile services in early 2016, and BellTel’s own ongoing plan to roll out its mobile network to become the fourth mobile network operator (MNO) in the Philippines, the conglomerate is putting itself in a strong position to challenge the status quo. As part of its mobile rollout plan, BellTel has formally integrated 197 base transceiver stations (BTS) in the country’s National Capital Region, following which the NTC issued it with 191 radio station licences (RSLs) for the provision of mobile communications services. In a filing in April this year, SMC said: ‘BellTel will be applying for additional RSLs as soon as more BTS are integrated into its mobile network and will launch services as soon as sufficient coverage for a commercial launch is achieved,’ going on to note that, to date, it has ‘expended considerable capital in relation to the acquisition and construction of sites, as well as the acquisition and installation of core and radio access network equipment and software’.

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