ABS-CBN to be a 'third' telco player

Posted at 05/28/2013 11:29 AM | Updated as of 05/28/2013 1:28 PM
ABS-CBN Chairman Gabby Lopez (2nd left) and Head of Convergence Carlo Katigbak (left) announce the network sharing deal with Globe Telecom, represented by President Ernest Cu (2nd right) and adviser Peter Bithos. Photo by Fernando Sepe Jr. for ABS-CBNnews.com

MANILA, Philippines (1st UPDATE) -- ABS-CBN Corp. is gearing up to become the country's "third player" in the telecommunications industry, following a "pioneering" network sharing agreement with Globe Telecom Inc.

ABS-CBN chairman Eugenio Lopez III said the media conglomerate will launch an "ABS-CBN mobile SIM" that will offer the same telco services plus exclusive content from the company.

"In essence, we're a third player," Lopez quipped at the press conference announcing ABS-CBN and Globe Telecom's partnership, Tuesday.

Subscribers using the ABS-CBN mobile SIM will be able to send texts, make calls, and surf the Internet like any other consumer on a telco platform. But this SIM, Lopez stressed, will have exclusive ABS-CBN content. 

"There will be television content that will be extended to the mobile platform; digital content which will be unique to the mobile platforms and which we'll be creating as a result of our consumer insights as to the way people like to consume content on mobile; and the third is an aggregated, user-generated content," Lopez said.

ABS-CBN, through unit ABS-CBN Convergence Inc., and Globe Telecom formally sealed a "network sharing agreement" that would pave the way for the multimedia giant to deliver content and traditional mobile services such as voice, SMS and data through the Ayala-led telco's infrastructure.

Lopez recounted ABS-CBN will be buying capacity from Globe Telecom under the five-year agreement.

Carlo L. Katigbak, president at ABS-CBN Convergence, said ABS-CBN will be investing some P2 billion to 3 billion in the next three years for the new venture.

"We're actually going to be a very asset-light company because the bulk of the investments have already been made by Globe [Telecom]. Most of the money is really for communications as well as working capital," he explained.

Katigbak said the SIM will be bundled with mobile devices such as tablets and smartphones, and will soon be made available in ABS-CBN stores before the year ends.

With regard to network congestion that could lead to problems in delivering the content, Ernest L. Cu, president at Globe Telecom, assured consumers that the telco's newly-upgraded infrastructure can take the additional traffic.

"Today, given the breadth of the network--the depth of the network in terms of its capacity [and] its highly-fiberized status, Globe is very confident that through its 2G, 3G, and now even 4G network, we would be able to serve the many Kapamilyas that will be joining the ABS-CBN mobile experience very shortly," Cu said.

Cu admitted that the launch of the ABS-CBN mobile SIM may eat up some of Globe's subscribers but said the partnership will benefit Globe in the long run.

"We feel that this offering is very unique to a certain segment of the market. While there is the danger for us for cannibalization and so on, we have studied the concepts that ABS-CBN has put forth and believe that that overlap will be minimum," he noted.

In December last year, Globe Telecom inked a deal with another Lopez-led company, Bayan Telecommunications Inc. 

Globe Telecom acquired $130-million worth of Bayan's debt, and in April this year, the Ayala telco said it is finalizing an amended rehabilitation plan for the Lopez-led firm, which has been in recovery since 2003 and is expected to remain so until 2023.

Lopez stressed the recently-signed agreement with Globe Telecom is a "separate" issue from the Bayan deal.

When asked if the two firms are planning more partnerships in the future, Cu said: "We continue to see what other synergies we can have between the two groups ... It takes time, we're not in a hurry, we're here for the long haul."

ABS-CBNnews.com is the news website of ABS-CBN Corp.