MANILA, Philippines - Telecommunications giant Philippine Long Distance Telephone Co. (PLDT) said yesterday its decision to raise its investment in MediaQuest Holdings Inc., owner of television network TV5 and direct-to-home satellite provider Cignal TV, highlights its stepped up efforts to diversify its business through new multi-media services.
PLDT, through wholly-owned subsidiary ePLDT, is investing P6 billion in the form of Philippine depositary receipts (PDRs) in MediaQuest to sustain the growth momentum of TV5 and Cignal TV. MediaQuest is owned and controlled by the PLDT Beneficial Trust Fund.
“The financial investment in media is important and expected to create value over a longer time frame but is one that is necessary for our growth and transformation,” PLDT chairman Manuel V. Pangilinan said. “Many other telecommunication companies worldwide have made similar investments in media assets.”
PLDT president and CEO Napoleon Nazareno pointed out that PLDT’s financial investment in media is consistent with its overall strategy of evolving itself from a traditional telco into a multi-media service company.
“With the direct investment, MediaQuest will serve as the anchor for the PLDT Group’s media offerings through the creation of content, generation of new revenue streams, and providing direct access to overseas Filipino workers worldwide,” Nazareno said.
In the early 2000s, PLDT’s diversification efforts took it into the outsourcing business by setting up ePLDT, which had call center and data center operations. The group’s outsourcing business has since been consolidated under SPi Global, which has posted gains in the past two years and accounts for five percent of the PLDT Group’s total revenues.
PLDT’s move into multi-media services seeks to take advantage of its extensive and robust fixed and mobile platforms to deliver digital media content, such as photos and videos through various devices including PCs, laptops, smartphones, tablets and smart TVs.
Its initial forays into multi-media services include PLDT Watch Pad, which offered MyDSL subscribers access to selected television and video content, and more recently the Telpad, the world’s first tablet landline that comes with its own exclusive video applications such as TelMeHow, an online do-it-yourself educational service on a range of interests such as cooking, fashion, travel and photography.
On its side, MediaQuest’s TV5 has developed innovative applications such as its enhanced weather reporting and Metro Manila traffic reporting services that can be or are already being made accessible to mobile phone subscribers.
Nazareno explained that economies of scale can be gained in the production of content for all platforms with the partnership while also generating proprietary content that could become a source of differentiation for the PLDT Group such as entertainment, news and interactive content.
“We could derive new revenue streams as we use the content to increase subscription revenues across the group’s various platforms and maximize advertising potential available from the sizeable subscriber base of the group,” he pointed out.
The PLDT Group is serving about 67 million mobile phone subscribers under the Smart, Talk N Text and Sun Cellular brands, approximately three million combined wired and wireless subscribers of PLDT, Smart and Digitel and more than 2.2 million combined fixed line customers across the country.
Meanwhile, TV5 has substantially increased its market share from 2.3 percent to 18 percent at the end of 2011 in Metro Manila and from 2.7 percent to 15.6 percent nationwide, and Cignal TV is now the largest DTH pay-TV operator in the country with over 250,000 subscribers.
At the same time, Nazareno said the investment could also provide direct access to over 12 million overseas Filipino workers around the world that have significant revenue potential with possible service offerings ranging from telecom, local content delivery, and money remittance.
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