The MVP Group is dropping plans to acquire ABS-CBN Corp.’s cable unit Sky Cable Corp. due to possible anti- competition issues.
Manuel Pangilinan, PLDT Inc. chairman and chief executive officer, said the company knew early on the deal will not be approved by the Philippine Competition Commission (PCC) as it may lead to a monopoly in the cable industry.
But he said the company was encouraged to submit an offer when the Bayanihan Act 2 was passed.
“There are commercial reasons why we did (make the offer). Upon review of the Bayanihan Act 2, the PCC (will)… review merger and acquisitions one year after the effectivity of the act,” said Pangilinan.
Republic Act no 11494 or Bayanihan to Recover as One Act exempts from PCC review mergers and acquisitions with transaction values below P50 billion for a period of one year from the effectivity of the Act.
Pangilinan fears PCC might eventually “reverse the agreement… in the course of the first year.”
PLDT Inc. through its media arm MediaQuest Holdings Inc. operates pay television service provider Cignal TV.
Both Cignal TV and Sky Cable offers cable and direct to home satellite television services in the country.
Sky Cable continues to operate despite the shutdown of its satellite services Skydirect with 1.5 million subscribers following the rejection of ABS-CBN’s franchise renewal
Meanwhile, PLDT expects core net income this year to be higher than P27-billion core profit last year driven by sustained growth on mobile and home broadband business amid coronavirus disease pandemic.
Pangilinan is optimistic in the prospect for 2021 despite the anticipated stiff competition as new telecom player DITO Telecommunity schedule to start operation in March and Converge ICT after the initial public offering is in better position to compete by next year
PLDT’s telco core income in the first nine months of the year, excluding Voyager Innovations, rose 8 percent to P21 billion from P19.4 billion last year. Consolidated EBITDA reached P66 billion as at the end of September, as a result of the higher service revenues and prudent cost management.
Pangilinan said service revenues will continue to rise in the fourth quarter compared to third quarter as robust demand for data expected to grow further.
Reported income grew by 23 percent to P19.7 billion from P16 billion last year. Service revenues stood at P126.6 billion for the first nine months of 2020, up 9 percent versus the same period in 2019.