Conglomerate San Miguel Corp. (SMC) is looking at buying another telecommunication firms, in addition to Liberty Telecom Holdings Inc., in its bid to become a major player in the wireless broadband arena.

Industry sources identified Express Telecommunication Co. as the phone firm that has also caught the interest of SMC. Some say that this is already a done deal between SMC and Express Telecom, while others note that the talks are almost in the final stages.

SMC president Ramon Ang confirmed yesterday that the food and beverage giant is taking a look at other phone firms. He, however, said that nothing has been finalized yet.

“We are still in talks,” he said in a text message to the BusinessMirror, when asked to comment about the supposedly “done deal” to purchase Express Telecom and another carrier currently engage in broadband wireless access (BWA) service.

When asked to clarify if SMC is indeed in discussions with others aside from Liberty, And texted: “We are in talks with potential telcos.”

SMC and Qatar Telecom (QTel), which has acquired a substantial stake in Liberty Telecom, are working on a joint-venture partnership.  At present, QTel holds about 34 percent in Liberty.  Ang was also recently elected chairman of the company.

The joint venture between QTel and SMC is obviously, as the sources pointed out, meant to take over Liberty. SMC alone cannot engage in telecommunications business because it does not have the Congressional authority. Qtel, being a foreign company, is restricted under the Constitution to own more than 40 percent of any public utility.

The goal, explained a source, is to transform debt-ridden Liberty as a major player in the industry, particularly in broadband services. As industry players have pointed out, broadband is the next revenue driver beside the cellular mobile telephone system (CMTS) service.

“It’s a frequency ballgame. While other players just have enough frequencies, Liberty has all the precious frequencies to be a major player in the broadband arena—plus it has QTel and SMC for funding,” said a source.  

Ang did not say if SMC alone is interested in Express Telecom or in any other telco for that matter. The sources said Express Telecom, though under rehabilitation, is still attractive because of the frequencies it holds.

Sun Cellular is another potential acquisition, other sources noted. In the past, the Gokongwei-owned cellular firm has always been reported to have engaged in talks with potential buyers.

One source said that it is Sun Cellular and not Express Telecom that SMC is looking at. “It is a valid strategy to buy into an existing cellular firm. It could easily compete with the two major cellular firms. It will just be a matter of combining the technical resources, financial and marketing. It’s a matter of how fast you can work and how good your people will be,” she said.

Officials of Sun Cellular did not reply when asked for comment.

Existing 3G (third-generation) cellular firms, including Globe Telecom, Smart Communications Inc. and its subsidiary Connectivity Unlimited Resource Enterprise (Cure) have also expressed interest in Express Telecom’s unused frequencies.

Express Telecom has not been using its full 10 Megahertz (MHz) of spectrum in  800 MHz, specifically within  835-845 MHz/880-890MHz. Further, the company was also given 5 MHz of additional bandwidth in the 1800-MHz range in September 2001.

Globe, Smart and Cure are all eyeing Express Telecom’s frequencies because these are of a lower bandwidth than the current 3G frequencies assigned to them. As such, their transmission and reception capability covers a greater range from a technology standpoint. This characteristic can permit the use of fewer 3G base stations and network elements, while still providing substantial coverage.

“Express Telecom’s frequencies can also be used for the deployment of wireless broadband services particularly in rural areas. They are not that keen on competing with the two cellular giants, which have already established their presence in the cellular market. Broadband is more in the horizon and that is where they will be,” noted another source.

Extelcom’s rehabilitation involves a restructuring of its equity profile by reducing the par value of its shares from P10 to P1.80 per share, and increasing the number of shares from the original 200 million shares to 1,111,111,11 shares. The company’s financial liabilities would then be converted to equity, with the original stockholders retaining their 200 million shares and the additional shares of 911,111,111 going to the creditors.