MANILA, JUNE 12, 2008
(STAR) By Mary Ann Ll. Reyes - Multi-media conglomerate Philippine Long Distance Telephone Co. (PLDT) is open to talks over a possible sale of its remaining stake in Sky Cable Corp., or an acquisition of the Lopezes’ majority stake in the cable television company, if the latter are willing to sell.

In an interview, PLDT chairman Manuel Pangilinan said that with their group’s stake in the country’s leading cable TV company now down to 14 to 16 percent, PLDT can sell its stake to the Lopez group in case they are interested in acquiring it.

“It is unlikely though that they will acquire it. If they in turn will sell their stake, we can look at the possibility of buying it,” he told The STAR.

The Lopezes, who also own ABS-CBN Broadcasting Corp., used to have a 66.67-percent stake in Sky Cable Corp. while the PLDT group, through Mediaquest Holdings, had a 33.33-percent shareholding.

However, with the conversion into equity of a loan extended by ABS-CBN to Sky Cable, Mediaquest’s stake was reduced to 14 to 16 percent.

Sky Cable earlier acquired the facilities of Mediaquest’s Home Cable Corp., merging the country’s two largest cable TV companies. Mediaquest was paid in shares in Sky Cable, thus the original 33.33- percent stake.

Following its virtual exit from the cable TV business, PLDT earlier this year announced that Mediaquest is launching in the third quarter of this year its very own direct-to-home (DTH) satellite television service with an initial investment of P700 million.

Pangilinan said there are no plans right now to enter into a joint venture with another entity for the DTH business.

According to Smart Communications chief wireless adviser OrlandoVea who also heads Mediascape, they are now rolling out the needed network for the DTH satellite TV service. “We are still talking to possible suppliers for the boxes but those are easy to source,” Vea said.

Mediascape is owned by Mediaquest, the wholly owned retirement fund subsidiary of PLDT.

PLDT’s foray into the DTH business will put it in direct competition with Dream Broadcasting, the country’s first and currently the only DTH service provider in the country which is owned by businessman and former PLDT chairman and owner Antonio “Tonyboy” Cojuangco.”

Vea said PLDT’s DTH offering will be “different,” offering the service at prices much more affordable that those being offered by Dream. “We will have different packages catering to different segments of the market,” he pointed out.

Pangilinan also told The STAR that in order to make DTH a more pervasive service in the country, its rates will be made very affordable.

It will be recalled that negotiations initiated by PLDT to acquire Dream Broadcasting bogged down due to serious disagreements over pricing. PLDT then had a joint venture agreement with US DTH giant Echostar Communications but the JV partners needed a company that had a local DTH license.

It was after failed talks with Dream that PLDT explored the possibility of acquiring another local DTH licensee, GV Broadcasting Systems Inc. owned by Vea’s group.

After successfully acquiring GV Broadcasting, whose name was later changed to Mediascape, PLDT and Echostar encountered major disagreements over the planned venture, resulting in a junking of the joint venture agreement.

PLDT’s entry into the DTH business will also put it in indirect in competition with the cable TV industry.

Pangilinan said he pulled out of the cable TV business and instead decided to enter the DTH arena because the latter holds more promise, aside from the fact that he has no control over the CATV business PLDT being a minority stakeholder in Sky Cable.

Sky Cable earlier announced that is spending around P600 million this year to convert more coverage areas from analog to digital-ready, install additional digital set-top boxes, and offer new cable television services.

The amount will be sourced from internally generated funds, company officials revealed.

Sky Cable now has close to 500,000 subscribers nationwide, of which roughly 200,000 are in Metro Manila.

Of the three million households in Metro Manila, Sky Cable can cover only 1.2 million. Of the 1.2 million, only 30 percent or around 400,000 subscribers are in the A,B, and C economic strata which are the target market for post-paid cable TV services.

Shares down sharply on inflation jitters Thursday, June 12, 2008

Share prices fell sharply for the second straight session yesterday, with the main index closing at a fresh 20-month low amid investors’ continued worries that inflation will cut profits and economic growth.

The 30-company Philippine Stock Exchange Index ended 66.67 points, or 2.5 percent, lower at 2,579.28, its lowest finish since Oct. 18, 2006, when it ended at 2,546.53.

Over the last two days, the market has lost 5.9 percent.

“Investors are still wary over macroeconomic issues.

Technically, however, a recovery should be forthcoming,” Asiasec Equities analyst Oliver Plana said.

In the broader market, losers outnumbered gainers 87 to 23, while 44 stocks were unchanged.

“Inflation is still a major concern even though oil prices have fallen slightly,” said Rommel Macapagal of Westlink Global Equities Inc.

“The past few weeks, we have been looking for directions and the direction we got was the big drop on Friday in the US market,” he said.

“The next support level is 2,550. Hopefully some bargain hunting could come in and lift us above the 2,600 level,” he said.

Philippine Long Distance Telephone Co. was the most actively traded stock, falling 4.1 percent to P2,335 in line with the overnight decline of its American Depositary Receipts. Ayala Corp., the country’s largest conglomerate, fell 4.9 percent to P290 on worries that rising interest rates would hurt the profitability of its property and banking subsidiaries. Power producer First Gen Corp. fell 3.2 percent to P30, while affiliate Manila Electric Co. lost 8.3 percent at P50 as the government scouts for ways to lower electricity rates. Metropolitan Bank & Trust Co., the country’s largest lender in asset terms, ended 1.4 percent lower at P36.50.

San Miguel Corp. saw its A shares, available only to Filipinos, fall 2.4 percent to P40.50 while its B shares, which are available to foreigners, were unchanged at P41.

Rising oil prices is stoking inflation fears in the Philippines, which rely heavily on imported crude. Inflation soared to a nine-year high of 9.6 percent in May, prompting the Bangko Sentral ng Pilipinas to raise key interest rates by a quarter percentage point on Thursday. That was the first rate hike since October 2005.

“A heightened inflation concerns will result in demand for higher fixed-income yields and throw off GDP growth expectations. It will also result in lower earnings forecast that will be an added drag to the equities market,” said Francisco Liboro, president of PCCI Securities. — AP

Chief News Editor: Sol Jose Vanzi

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