Duterte signals Zamora’s PT&T as third player in telco industry

DAVAO CITY—It’s official. Former leading telegraph company Philippine Telegraph & Telephone Corp. (PT&T) has resurrected from a long hibernation and has entered as the third player in the local telecommunication industry that’s saddled with snail-paced Internet and mobile-load loss.

“Time is up for the two telecom companies, Globe [Telecom Inc.] and Smart [Communications Inc.],” President Duterte told journalists last Friday.

The President’s office asked for an embargo on naming PT&T as the firm challenging Globe and Smart on the business of mobile communications.

Duterte’s longtime personal aide and Special Assistant Christopher Go “gave the go signal [on Monday] to bare the decision of the President”.

Listed firm PT&T said last month in a disclosure to the Philippine Stock Exchange (PSE) it sold majority shares to Menlo Capital Corp., a company majority-owned by Zamora and Peregrino P. Fernandez.

In accordance with our disclosure dated August 25 that Menlo Capital acquired from Republic Telecommunication Holdings Inc. 559,995,728 common shares of PT&T, which is equivalent to 70.05 percent of its listed shares, PT&T said. The firm told the PSE the transaction is worth less than P1 billion.

PTT was incorporated on November 14, 1962, as a diversified telecommunications entity catering to the corporate, small and medium business and residential segments across the country.

Two years later on June 20, PTT was granted a 25-year national legislative franchise. An amendment to the franchise was made in 1967 granting the company, among others, equal privileges against any competing franchise.

PTT listed on January 10, 1990, for the trading of its common shares but requested voluntary suspension of trading effective December 13, 2004.

PT&T has told the PSE it intends to seek the lifting of the voluntary suspension of trading of its shares in the exchange.

Hobbled by financial difficulties after the Asian financial crisis, the firm sought court intervention for rehabilitation. PT&T then downsized its operation and instead concentrated on the National Capital Region, including the provinces of Batangas, Laguna, Rizal, Cavite, Bulacan, Pampanga up to Angeles City.

Its main services are high-speed broadband Internet, data services and accept colocation for data centers.

“PT&T intends to expand its fixed broadband business in Metro Manila and that the management is hopeful that the resumption of the trading of the company’s shares in the exchange will play a major part in the success of such expansion plan,” PT&T told the PSE in a disclosure on August 28. “The expansion plan will necessarily require PT&T to have strategic partners and the company is confident that the resumption of trading of its shares in the PSE will provide an opening for strategic partners to participate in such expansion.”

Duterte is actually not a stranger to PT&T since Davao City was the company’s center of operations in Mindanao. For many remote towns and cities like Davao, the only means or alternative medium of communications are long distance service, telegram and Internet cafes, among others.

“All it took the President to decide was when he learned that PT&T has existing frequencies and when he was advised that PT&T’s franchise was just renewed,” a person familiar with the matter said.