Who is Leo San Miguel?

Posted at 03/11/2008 7:00 PM

Leo San Miguel By LALA RIMANDO
abs-cbnNEWS.comNewsbreak

The career of "cable TV guy" and Senate witness Leo San Miguel thrived at a time when the development of broadband technology and services was at its infant stage. Those days have long been overcome by newer and more efficient ways to offer broadband services.


Mr. San Miguel was today's surprise witness at the Senate's seven month-long investigation on the controversial National Broadband Network (NBN) project designed to reduce telecommunication and internet costs of government offices. He was a technical adviser of NBN supplier, ZTE Corp. of China.


Mr. San Miguel finished engineering from FEATI University and took up computer studies in Princeton University.


He has long been involved in cable TV services. He established Home Cable in 1990 and sold his stake in the firm in 1999.


The cancelled NBN project was supposed to use the WIMAX technology, a wireless platform, to connect government offices all over the country.
 
CABLE VS. DSL
In the late 1990s, cable TV was considered as the better technology to enhance Internet connection.


"About ten years ago, the debate on what is the better and more economically viable technology was between cable TV and DSL (digital subscriber line, which allows digital data transmission over the wires of a local telephone network)," explained Gio dela Rosa, senior investment analyst at Deutsche Regis Partners, Inc. "But cable has long been in the background because there are other technologies that are now more efficient in terms of speed and cost. Now, the debate is between DSL and wireless technologies."
 
Even Philippine Long Distance Telephone Company (PLDT), the leading telecommunications company in the country, which was once gung-ho about the prospects of using cable TV network as one of the primary technologies to roll out its broadband services, has put its investments in cable TV in the backburner.
 
"Those days have long been overtaken by events," said Ray Espinosa, president of several PLDT subsidiaries, which include Philippine Home Cable Holdings (PCHC).
 
PLDT is now betting on different technologies, such as DSL and wireless broadband.
 
SOLD HOME CABLE IN 1999
In 1999, PLDT bought out the stake of Mr. San Miguel and his partners in Home Cable, which was then the second-largest cable TV service provider. San Miguel was then Home Cable's chief operating officer.


"We didn't have any involvement with him (San Miguel) after we bought out the group of original stakeholders (in Home Cable)," said Espinosa.
  
The buy-in of PLDT was supposed to help expand Home Cable's operations to more densely-populated areas where it can potentially ride on PLDT's backbone.


PLDT, on the other hand, was pursuing its convergence strategy that would enable the company to offer different voice, data, and media products in a combined or shared infrastructure composed of fixed line, cellular network and cable television.
 
But the cable television industry was beset with problems, including rampant piracy, collection problems, and high cost of programming. Thus, while cable television companies launched several cable-based Internet connection services, cash flow problems, limited coverage, and low take-up by customers undermined their efforts.


MERGED WITH SKYCABLE
Eventually, PLDT merged its cable interest in PCHC with the Lopez family's Central CATV (trade name: Sky Cable), which was twice its size. Central CATV is an affiliate of abs-cbnnews.com's parent company, ABS-CBN.
 
Because of Central CATV's financial problems, ABS-CBN granted a $30 million convertible loan in 2004 to Central CATV after PLDT decided not to put more money in the cable television company.
 
As ABS-CBN's loan's principal and interest are due to be converted into equity in Central CATV this year, PLDT's share will be reduced significantly from its original 33 percent level.
 
Espinosa said they will just hold on to whatever diluted stake they now have in Central CATV. "Our focus now is on DSL and wireless broadband technologies."


PRO-FOREIGN OWNERSHIP IN CABLE
Mr. San Miguel was the chief operating officer of Home Cable before he and his partners sold their stake to PLDT. He was also involved in various industry initiatives including moves to allow foreign ownership in the cable television industry.


According to the Philippine Cable Television Association, an umbrella organization of cable operators in the country, San Miguel served as the industry association's president in 1995 to 1996.
 
He eventually founded and is a director-President of Asia Cable Communications Inc., a distributor of cable programs to various small cable operators in the provinces. He is reportedly on leave. -- with a report from Maricar Bautista, ABS-CBN News