Telstra and beer company San Miguel Corporation have been unable to reach a commercial agreement to build a new mobile network in the Philippines.
The two formally ended negotiations for the $US1 billion joint venture to create a third player in the Philippines’ market after local player PLDT and Singtel-backed Globe Telecom.
The breakdown could be a positive for Telstra’s share price. There had been concerns about the telco’s cash being invested in a highly competitive market.
“Despite an enormous amount of effort and goodwill on all sides, we were simply unable to come to commercial arrangements that would have enabled us all to proceed,” says Andrew Penn, the Telstra CEO.
He says Telstra, Australia’s biggest telco, will continue to pursue growth opportunities in Asia.
Negotiations for the deal originally began in August last year, where Telstra had planned to sink billions of dollars into the venture to take on the local telco giants.
Last year, when David Thodey was CEO, Telstra bought Pacnet for about $858 million in a deal which gave it a virtual private network in Asia and data centre services in China.
“Investments remain an important part of our future to ensure sustainable growth in earnings and shareholder returns over time,” Penn says.
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