PLDT + Digitel = Improved Broadband Service?
The recent acquisition of 51.55% equity in Digitel Telecommunications Philippines Inc. (Digitel) by the Philippine Long Distance Telephone Co. (PLDT) is the biggest news in the Philippine business world this week. The transaction amounting to PhP69.2 billion will be paid by mandatory offering of PLDT shares at PhP2,500 a piece under the name of JG Summit Holdings Inc. (Digitel’s majority stockholder) which will then have 12% ownership and one seat at the telecommunications giant’s board of directors. Combined, the PLDT and Digitel will account for about 67 percent of the local market in terms of revenue.
PLDT said it intends to keep Digitel’s Sun Cellular brand separate and intact thus giving the country’s oldest and largest telecommunications company its fourth mobile phone service aside from Smart, Talk N Text, and Red Mobile. Sun Cellular has a subscriber base of around 14 million while Digitel is also bringing into the alliance some 450,000 subscribers in addition to PLDT’s 1.8 million subscriber base in fixed line operations.
With the merger, PLDT said it hopes to make available to Digitel subscribers better service offerings more specifically 3G or third generation cellular technology and broadband Internet. The question now is . . . will the merger bring about improved broadband service? Will their remaining competitors in providing Internet service to the public try to outdo them?