San Miguel Corp, Telstra end joint venture plan
MANILA, Philippines – The country's most diversified conglomerate, San Miguel Corporation (SMC), and Australia's biggest phone and Internet provider, Telstra Corporation, have ended talks over a planned joint telecommunications venture in Philippines, after both failed to agree on an equity investment.
"Both SMC and Telstra worked hard to come up with an acceptable resolution to some issues. However, we agreed we can no longer continue with the talks. I believe this is best for all parties," Ramon Ang, SMC president and COO, said in a statement.
Telstra, which announced the talks in August, was planning to invest up to $1 billion in the planned joint venture in the Philippines, which has one of lowest and priciest mobile network services in the world. (READ: Telstra-San Miguel venture a bumpy, costly ride - think tank)
Telstra CEO Andrew Penn was quoted in Dow Jones as saying "the opportunity is strategically attractive" and Telstra has "great respect for San Miguel Corporation and its President Mr. Ang." He added that "it was obviously crucial that the commercial arrangements achieved the right risk-reward balance for all involved.”
Although the planned venture ended, Telstra said in the report that it has offered to continue its technical network design and construction consultancy support to the Ang-led conglomerate.
Ang: We will continue without Telstra
Despite the abandoned plans with Telstra, SMC said it would still switch on its telecommunications network along with its high-speed internet service as scheduled.
Ang announced at the Forbes Global CEO Conference in October last year that his company will launch a third major telecommunications player in the country by 2016. (READ: Ramon Ang: We hope to open 3rd major telco by 2016)
"SMC's entry in the telecom market will definitely be a game changer. When we launch, consumers will benefit from better, cheaper service," Ang said.
Ang added that SMC is still interested in considering other joint venture opportunities for its telco business.
However, he said: "We are not rushing. What's important is that we give Filipinos a third and better choice that they have been deprived of for the longest time."