Australia’s biggest telco, Telstra, is in talks with Philippines’ San Miguel about investing in a multimillion joint mobile network venture.
Telstra confirmed it was in discussion with Philippines’ largest conglomerate San Miguel Corporation (SMC) — whose investments span across food, packaging, energy and beer — in what could be the telco’s first foray into the South East Asian consumer market.
There are concerns that buying into a Philippines mobile provider would be a risky business venture especially after Telstra learnt the hard way in its failed acquisitions of two Chinese mobile companies for $302 million in 2009.
“We note recent speculation concerning Telstra considering an investment in a wireless joint venture in The Philippines with San Miguel and that financing is being sought in relation to that joint venture,” Telstra told the Australian Securities Exchange.
“We are in discussions in relation to these matters. However, no agreements have been reached in relation to these matters and there is no certainty that this will occur.”
Philippines’ mobile market is currently dominated by PLDT and Globe Telecom with a mobile penetration rate of more than 100 per cent but with most of its services relying on outdated 2G services. An investment with San Miguel could see to a quicker rollout of 4G services which covers less than 5 per cent of the market.
Earlier this year, Telstra CEO Andy Penn described Asia as a key part of his growth strategy building on former CEO David Thodey’s vision to see a third of the telco’s revenue coming from Asia by 2020.
Last year, the telco bought Singapore and Hong Kong based-Pacnet for $697 million to boost its customer base as well as introducing new virtual private network and data centre services in China.