MANILA, The Philippines-Globe Telecom, the second-largest cellular telephone operator in the Philippines, announced a US$2.3 billion merger with another Philippine wireless service provider, Isla Communications. The agreement allows Ayala Corp., Singapore Telecom and Deutsche Telekom to partner on the island nation.
Globe Telecom is a joint venture between Ayala Corp. and SingTel. Deutsche Telekom is a major shareholder in Islacom.
The merger between Globe Telecom and Islacom was first announced last year, and the combined firm will have about 1.2 million digital wireless subscribers, in addition to wireline and data transmission services.
Globe Telecom said that it will issue new convertible preference shares to a holding company to be owned 60 percent by Ayala and 20 percent each by SingTel and Deutsche Telekom. Each of the three companies will own 27.8 percent of the new common shares of Globe Telecom.
The Philippine wireless market has seen dramatic consolidation during the last year. Philippine Long Distance Telephone Co. (PLDT), the country’s dominant telecom company, purchased Smart Communications, the largest cellular phone provider in the Philippines, in 1999. PLDT owns mobile phone operator Pilipino Telephone and increased its market share of the country’s wireless phone business to 54 percent with the acquisition of Smart Communications.
Globe Telecom reportedly will have 40-percent market share after its merger with Isla.
Express Telephone is the country’s only other wireless provider.
