Globe buys into two broadcast firms

By Lenie Lectura, BusinessMirror

Posted at Feb 18 2009 02:37 AM | Updated as of Feb 18 2009 10:37 AM

It looks like the acquisition bug has also bitten Ayala-controlled Globe Telecom.

Bethlehem Holdings Inc. (BHI), in partnership with the Globe Telecom Group of Companies, recently bought a substantial stake in Altimax Broadcasting Co. Inc. and is in the process of acquiring Broadcast Enterprises & Affiliated Media Inc. (BEAM) in its bid to offer digital wireless cable television service, sources said.

A copy of the deed of absolute sale between BHI and Altimax was obtained by the BusinessMirror yesterday. BHI bought 7,800 shares of Altimax, representing 39 percent of the issued and outstanding capital stock of the broadcast firm. The acquisition was valued at P780,000. The contract was signed by Altimax chairman Mel Velarde and BHI chairman and director Alberto de Larrazabal.

BHI is an investee of the Globe Group Retirement Fund (GRF) through the latter’s holding company, HALO Holdings Inc. Formed in 2007, BHI is a holding company investing in enterprises that provide broadcast content and broadcast-related services to mobile service providers. Its authorized capital stock was increased to P850 million last year.

BHI, said a BusinessMirror source, was created so that cellular mobile phone firm Globe Telecom can offer mobile TV. The joint venture between Ayala Corp. and SingTel earlier said it is setting its sights on opportunities outside the traditional borders to create new areas of growth.

“Broadcast firms are all Filipino-owned. In order for one to offer the mobile TV service, the company should be 100-percent Filipino owned. Globe, which is not a fully Filipino-owned company, needs to partner with a broadcasting firm before it can go into mobile TV or any similar service involving broadcast,” said the source. “That vehicle is now BHI,” explained the source.

Mobile TV is a broadcast service that delivers content to many viewers simultaneously through the digital TV broadcast signal for mobile devices—similar to how a conventional TV service delivers TV signal to homes.

Globe president Gerardo Ablaza declined to comment. But in previous occasions, he was quoted as saying that the cellular firm is interested in exploring “very seriously” mobile TV and prospects for that was “reasonable.”

Globe was earlier engaged in talks with Philippine Multi-Media System Inc. (PMSI), operator of Dream Satellite TV, for a possible equity deal but negotiations did not push through because the Direct-to-Home (DTH)-licensed firm declared bankruptcy.

“We have to look for partners that can broadcast and provide content. The problem with mobile TV service is that there are so many moving pieces; there are so many components that we have to look. We continue to be in discussions with possible partners and that includes content providers and broadcast,” Globe chief finance officer Delfin Gonzalez said in an earlier interview.

The contract also states that Altimax is no longer operational and its provisional authorities to operate various broadcasting services were no longer renewed by the National Telecommunications Commission (NTC) due the nonutilization of frequencies.

“Altimax is currently engaged in many lawsuits, including with the NTC. These cases are expected to be dropped soon especially now that Globe lawyers are the ones taking over some of the cases already,” added the source.

A check with the NTC showed that Altimax has informed the agency in a filing late Monday that the company would now be represented by Salalima Gonzales Castelo & Ungos law firm. These lawyers were also named as co-counsel for Altimax.

With BHI as its new investor, Altimax is asking the NTC to restore its permit to operate Multi-Channel Multipoint Distribution System (MMDS) service, which is actually a pay-TV service.

It also wants the NTC to restore its frequencies. According to Altimax, the frequencies assigned to it translate to about eight standard 6 Megahertz (MHz) NTSC TV broadcast channels in analogue mode, and up to 32 TV broadcast channels in digital mode.

“In order to capitalize on the availability of MMDS set top boxes commonly used in the US market, Altimax and BEAM can use hybrid mode in order to deliver digital wireless cable TV. This will be a significant improvement over analogue signals delivered to the market today,” said Altimax.

It added that commercial arrangements with the Globe Group facilitated by entry of BHI will enable delivery of converged broadband over MMDS.

Further, the Altimax-BEAM alliance can deliver Direct to User (DTU) wireless cable TV to their combined clientele. “Again, both firms shall be able to bank on merged resources for the development and implementation of a sound DTU service proposition. This will promote the roll-out of DTU in unserved areas of the country,” added Altimax.

Altimax, it added, can leverage on Globe’s pervasive sales and distribution network. “The BHI-Globe-BEAM alliance brings to the fore more marketing and technical expertise, infrastructure and technology, experience, manpower and financial stability to Altimax.