China Telecom, local tycoon’s joint bid poised to win Philippine telco license

Two other bids were rejected due to technical reasons. (File/AFP)
Updated 07 November 2018
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China Telecom, local tycoon’s joint bid poised to win Philippine telco license

  • Duterte had repeatedly expressed a preference for a Chinese telecoms firm to enter the Philippines
  • There were only two rival bids to Mislatel’s, from local companies, but both were rejected by the telecoms regulator for being incomplete

MANILA: A consortium of China Telecom and firms controlled by a Filipino tycoon appeared poised on Wednesday to win the Philippines’ third telecoms license, after two rival bids were rejected and foreign players tipped to participate opted out.
State-controlled China Telecom joined businessman Dennis Uy, whose interests include real estate, energy, shipping and logistics, under a consortium called Mislatel, hoping to win the right to challenge existing players Globe Telecom and rival PLDT.
The third license, which could be awarded by year-end, comes at the behest of Philippine President Rodrigo Duterte and aims to boost the country’s notoriously patchy services and end a domestic duopoly long accused of being uncompetitive.
Duterte, who has made strong business ties with China his top foreign policy priority, had repeatedly expressed a preference for a Chinese telecoms firm to enter the Philippines, and even verbally “offered” the license to Chinese Premier Li Keqiang.
Uy’s ties to the president are well known and he was a contributor to his 2016 election campaign, hailing from Davao, the city where Duterte was mayor for 22 years.
South Korea’s KT Corp. issued a statement with Philippine firm Converge ICT confirming they had decided against bidding, while Vietnam’s Viettel, which in August confirmed its interest in the Philippines, said it would not contest.
Norway’s Telenor had bought bid documents but did not enter the contest.
There were only two rival bids to Mislatel’s, from local companies, but both were rejected by the telecoms regulator for being incomplete.
The two disqualified bids were from Philippine Telegraph & Telephone Corp. and a consortium of TierOne and LCS Group. Both bidders said they would appeal the regulator’s decision.
Foreign firms are required by law to join a consortium due to a 40 percent ownership cap in a local telecoms outfit, which experts say has limited competitiveness in a sector worth about $5 billion a year in revenue.

Lucrative market
Analysts see the Philippines and its 105 million people as a potential growth market due to its thriving business process outsourcing sector and its underdeveloped mobile and fixed-line services, which consumer groups have complained are unreliable and expensive.
Both Globe and PLDT’s mobile unit, Smart, say they have been investing big in boosting network coverage — $950 million and $1 billion respectively this year — but are constrained by weak regulations that make acquiring permits for building infrastructure a painstakingly slow and complex process.
Telecoms Minister Elizeo Rio recently told Reuters moves are underway to streamline that, introduce tower-sharing requirements and eventually, raise foreign ownership caps.
A Viettel source told Reuters the time was “not appropriate” to bid, while KT Corp. and Converge said the Philippine market and industry outlook were financially viable, but “conditions imposed for participation render the venture commercially unviable.”
Aristoteles Elvina, a special assistant to the head of Converge, said there was no point bidding against a company owned by the Chinese government, or getting a license that demands a new entrant commits to things operators Globe and Smart were not required to do.
“We don’t feel it is a level playing field,” he told reporters.
“The existing players right now were not asked to do what we’re being asked. Like we have to put up speed, coverage.”
The Mislatel consortium includes three companies, China Telecom, and two of Uy’s firms, Udenna Corporation, a holding company, and Chelsea Logistics Holdings, one of its units.
Chelsea’s shares were up 35 percent on Wednesday afternoon after news that Mislatel’s was the lone qualified bid.


Abu Dhabi Commercial Bank picks Barclays to advise on merger

Updated 18 min 32 sec ago
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Abu Dhabi Commercial Bank picks Barclays to advise on merger

  • Potential merger involves ADCB, Union National Bank (UNB) and Al Hilal Bank
  • A merger of the trio could create an entity with around $113 billion in assets

ABU DHABI: Barclays has been appointed by Abu Dhabi Commercial Bank (ADCB) to advise on a potential merger plan involving Union National Bank (UNB) and Al Hilal Bank, banking sources told Reuters.
The merger, announced by the banks in September, is the latest consolidation among state-owned companies in the United Arab Emirates’ (UAE) capital.
ADCB, majority owned by the Abu Dhabi government and the second largest bank in the emirate after First Abu Dhabi Bank (FAB), declined to comment. Barclays also declined to comment.
If it goes ahead, a merger of the trio could create an entity with around $113 billion in assets, according to Refinitiv data, and the UAE’s third-biggest lender after FAB and Emirates NBD.
A separate source said two banks could be created out of the consolidation, with the conventional banking units of ADCB and UNB merging to create one lender.
Another could be formed through combining the Islamic banking units of ADCB and UNB, along with Al Hilal.
AlKhaleej newspaper reported the same arrangement was being considered last month, citing sources.
The tie-up was at an early stage, UAE Central Bank governor Mubarak Rashed Al-Mansoori told reporters last week on the sidelines of a conference, adding he expected more consolidation in the future.
FAB was created by last year’s merger between National Bank of Abu Dhabi and First Gulf Bank.
The emirate of Sharjah is weighing a merger between three of its banks — Bank of Sharjah, Invest Bank and United Arab Bank, Reuters reported in September, citing sources.