Fitch upbeat on PLDT-Globe acquisition


Posted at May 31 2016 05:02 PM

MANILA - Fitch Ratings is upbeat on the joint acquisition by Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom of San Miguel Corp.'s telco business.

Fitch said the deal removes the threat of heightened competition in the sector though it temporarily increases the leverage costs of the two operators.

It said both companies are expected to gain from the acquisition, with Globe Telecom reaping more benefits "as it has greater exposure to the mobile sector."

The acquisition will provide PLDT and Globe with access to efficient 700 megahertz spectrum, which will enhance its 4G services.

"We believe that both PLDT and Globe will invest aggressively to expand their data services, now that they will have access to the coveted 700MHz spectrum, which is able to penetrate walls and is useful to provide in-building coverage," Fitch said.

READ: PLDT, Globe to acquire San Miguel's telecom business

PLDT and Globe have long been rivals in the country's telecommunications industry, gobbling up competitors along the way.

In 2011, PLDT completed a P69.2-billion acquisition of a majority stake in Sun Cellular, which attempted to break the duopoly with aggressively low-priced offerings. Last year, Globe took a controlling stake in Bayan Telecommunications.