The Philippine Long Distance Telephone Company (PLDT) and JG Summit Holdings, Inc. (JGS) announced Tuesday, the acquisition of Digital Telecommunications Philippines, Inc. (Digitel) by the Philippine Telco juggernaut, PLDT.
Digitel is the country’s second-largest fixed-line telecommunication company by the Gokongwei family-owned JGS Holdings; and is the owner of the Digitel Mobile Philippines, Inc. or better known for its brand as Sun Cellular.
The acquisition is an “all-share transaction” in which PLDT will take over 51.55% of Digitel’s total share, amounting to Php 74.1 billion, and in exchange – JGS Holdings will get 12.8% of PLDT’s stake plus a seat at the Telco’s Board of Directors. The acquisition is expected to be completed by the end of the second quarter this year.
Though it’s obvious that PLDT (which operates its wireless subsidiary, Smart Communications Inc.) would have the full control of Digitel – the disclosure to the Philippine Stock Exchange says “mobile operations of Digitel will remain separate and intact”; to maintain and capitalize on Sun Cellular’s operations to continue serving specific market segments particularly the “unlimited” service.
The acquisition of Digitel/Sun Cellular will allow them to leverage PLDT/Smart Communications’ infrastructure, thus providing a better service to consumers; however the merger could also result into less competition, not unless the lone Globe Telecom beat all the odds, perhaps for the common good. What do you think?
Update: Sun Cellular Unlimited Call and Text Services To Continue Despite PLDT’s Acquisition