Telstra drops plans to enter PH telecoms market with San Miguel

Sad news for those who are waiting for the Telstra-San Miguel joint Internet venture as both companies have already ended their negotiations regarding their plans to enter the Philippine market together.

Read: What did Telstra and San Miguel not agree on?

Telstra CEO Andy Penn said that the companies could not reach commercial arrangements on a possible equity investment on the said venture. Telstra and San Miguel have been in talks since August 2015.

“While this opportunity is strategically attractive, and we have great respect for San Miguel Corporation and its President Mr (Ramon) Ang, it was obviously crucial that the commercial arrangements achieved the right risk-reward balance for all involved,” Penn said.

Although joint ventures with San Miguel is out of the picture, Telstra will continue to offer network design and construction consultancy support to San Miguel and pursue other growth opportunities in Asia.

Back in February, San Miguel Corp. President Ramon S. Ang said that the company could still launch its LTE high speed Internet service in the Philippines even without a partner.

“Nobody can stop this anymore. When we launch, we expect to lure subscribers right away with better quality and cheaper Internet.” Ang said.

P.S. Last December, we made our Top 5 Tech Predictions for 2016 and this news is one of them. We also wrote an opinion piece “This excitement over Telstra will end up in a big disappointment” and we explained why.

Here’s a copy of the press release:

Negotiations ended on Philippines wireless joint venture

14 March 2016 – Telstra and San Miguel Corporation have been unable to reach commercial arrangements on a possible equity investment in a wireless joint venture in the Philippines and negotiations have therefore ceased.

Telstra Chief Executive Officer Andrew Penn today said the organisations had agreed at the weekend to bring negotiations to an end.

“Despite an enormous amount of effort and goodwill on all sides, we were simply unable to come to commercial arrangements that would have enabled us all to proceed,” Mr Penn said.

“While this opportunity is strategically attractive, and we have great respect for San Miguel Corporation and its President Mr Ang, it was obviously crucial that the commercial arrangements achieved the right risk-reward balance for all involved.”

Telstra has offered to continue technical network design and construction consultancy support to San Miguel Corporation, should those services be required.

“We continue to pursue growth opportunities in Asia consistent with our strategy. Following our April 2015 acquisition of Pacnet, Telstra is now one of the largest connectivity providers in Asia,” Mr Penn said.

“Our investment decisions will be guided by our capital management framework. Investments remain an important part of our future to ensure sustainable growth in earnings and shareholder returns over time.”

Telstra last year confirmed it had been negotiating a possible joint venture with San Miguel Corporation and envisaged investing up to USD$1 billion should the joint venture proceed.