Globe looks for a long term CURE

17 Apr 2012

The chief executive officer of Filipino telecoms operator Globe Telecom, Ernest Cu, is on record as saying that his firm will bid for the 3G licence of Connectivity Unlimited Resource Enterprises Inc (CURE), once its new parent – rival Philippine Long Distance Telephone (PLDT) – divests its interest in the firm. Rappler.com quotes Cu as saying that Globe is interested in pursuing CURE and will ‘bid aggressively’ once the time is right. ‘We need CURE. We have a premium base and those consumers are going to ask us to provide faster services,’ the CEO said during a press conference after Globe’s annual stockholders meeting yesterday.

CURE currently owns and operates the Red Mobile brand in the Philippines, however, its sale is a condition of the merger deal that saw PLDT take control of another domestic operator, Digital Telecommunications Philippines Inc (Digitel). The regulator, the National Telecommunications Commission (NTC), approved the deal but stipulated that whilst CURE can sell its Red Mobile business to PLDT’s mobile division Smart Communications, in turn the new owner must divest all rights and interests in CURE. As such, the rump of the firm – including its congressional franchise and its 10MHz 3G mobile licence – will be returned to the NTC for reallocation at a later date via auction. PLDT was due to submit its divestment plans to the watchdog by 13 April but has been granted an extension until 23 April. The NTC has warned that the auction process could be jeopardised if PLDT continues to delay, and warned that it could even seek to nullify the telco’s takeover of Digitel if it continues to drag its heels. Here, NTC deputy commissioner Carlo Jose Martinez has said: ‘They are aware of those conditions so we will just wait for them to submit.’

According to TeleGeography’s GlobalComms Database, earlier this month the NTC asked PLDT to update it on its ongoing divestment plan and confirm that it will be complete by July 2012. PLDT now has just three months to finalise the phased migration of Red Mobile customers to sister firm Smart Communications’ network. Once the frequencies are returned, the regulator intends to launch an auction to sell them off again. PLDT and its subsidiaries are prohibited from participating in the bidding process, although interest is expected from Globe Telecom, San Miguel Group and Bell Telecommunications Inc (BellTel) along with other telecom players such as Bayan Telecommunications and Multi-Media Telephony Inc.