Globe Telecom should tap BayanTel deal to improve services

Summary:Philippine mobile operator is expected to complete its takeover of BayanTel with government approval expected to be given by year-end, but whether Globe will use the opportunity to improve its services remains to be seen.

All indications seem to point toward Philippine telco Globe Telecom being able to completely take over Bayan Telecommunications (BayanTel) and have a leg up on rival Smart Communications.

Globe Telecom
Globe Telecom will have access to 4G spectrum through BayanTel deal.

Although the process is not without obstacles, with the dominant carrier Philippine Long Distance Telephone (PLDT) filing an appeal to legally oppose the mega merger, the deal is expected to secure government approval before the year ends.  

In a nutshell, Globe wants to take over BayanTel by converting BayanTel's debt to equity and effectively changing the ownership in Globe's favor. Debt-ridden BayanTel provides landlines in key areas across the Philippines and has a significant portion of the domestic broadband market with its substantial DSL broadband user base.

BayanTel also holds another key asset that is seen to benefit Globe: it holds frequencies for 4G that Globe can access once the merger is complete.

In fact, the use of the additional 4G frequencies was one of the issues raised by PLDT in opposing the deal. PLDT contends that would be "grossly unfair" for Globe to get more frequencies especially since PLDT, through its mobile arm Smart, has more subscribers than Globe.

Globe, however, contends that everything is legal and "above-board" in the takeover and that the timing for the merger is right, given that BayanTel is in the process of rehabilitating its debts that ring in the billions of dollars. After the debt to equity conversion, Globe is expected to own more than 50 percent of BayanTel and become its majority owner.

But if we skip the financial and business legalese, what does the takeover mean for consumers? How will the Philippine communications landscape look once the takeover is complete? Will the additional resources from BayanTel improve Globe's network services, which in recent months have been taking a beating from the wave of consumer complaints such as drop calls and difficulty in connecting?

On the Internet side, how will Globe integrate BayanTel's broadband offering into its own? Are consumers going to get new broadband service packages, and how much improvement can consumers get, particularly for mobile Internet services now that Globe is poised to get more spectrum?

They say the availability of more choices is always good for the consumers. In Globe's takeover of BayanTel, one can hope, or perhaps expect, that rival Smart will also up the ante in terms of service excellence, thus, making consumers in the country the ultimate winner in the end.

Topics: Telcos, 4G, Philippines

About

Joel has been a media practitioner since 1996, starting off as a reporter and eventually becoming editor of a pioneering IT trade newspaper in Manila. He is currently one of the content producers of a Manila-based developmental website.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.