PLDT Inc. said Thursday it withdrew an offer to acquire the cable company of ABS-CBN Corp. over regulatory issues.
“We have withdrawn from the bidding process for SkyCable. The main reason that we did that [is] on review of Bayanihan Act 2. The PCC [Philippine Competition Commission] has the ability to review merger and acquisitions one year after the effectivity of the act and possibly reverse agreements,” PLDT chairman and president Manuel Pangilinan said in a virtual briefing.
Pangilinan said the PLDT Group was encouraged to acquire SkyCable when the Bayanihan Act 2 was passed into law.
“So, we put an offer to ABS-CBN, but on further review, we’re told that there’s risk of a possible divesting of us on review starting the second year of the year. That’s the main reason. There’s nothing beyond that. No other reason,” Pangilinan said.
Under the law, business merger or acquisition agreements may not be consummated without the approval of the PCC, which may reject transactions that prevent, restrict or lessen market competition.
PLDT Group operates direct-broadcast satellite TV provider Cignal TV Inc. which competes with SkyCable. Cignal TV transmits 121 channels including free-to-air, SD and HD channels to household and commercial venues nationwide. It also offers a mix of 12 audio channels and on-demand service through pay-per-view channels.
SkyCable had nearly 300,000 broadband subscribers and more than 500,000 cable users as of September 2019.
The National Telecommunications Commission earlier ordered ABS-CBN Corp. to stop operations following the expiration of its congressional franchise. Republic Act No. 7966, which granted ABS-CBN a 25-year franchise to operate TV and radio broadcasting stations, expired on May 4, 2020.
The Radio Control Law bars the operation of a radio broadcasting station without a franchise from Congress.
Meanwhile, PLDT on Thursday announced a 23-percent growth in net income in the first nine months, boosted by data and broadband businesses.
The country’s largest telco said net income reached P19.7 billion in the nine-month period, up from P15.99 billion in the same period last year. Third-quarter net income jumped 96.57 percent to P7.47 billion from P3.80 billion a year ago.
PLDT’s core net income also rose by 8 percent in the first nine months to P20.96 billion from P19.40 billion in the same period last year as service revenues grew 9 percent to P126.6 billon from a year earlier.
Service revenues hit P44.36 billion in the third quarter, up from P40.65 billion in the same period last year.
“We have seen our service revenues grow consistently quarter-on-quarter since 2018. If not for the negative impact of the lockdown in the second quarter of this year, we would have had 11 quarters of consecutive growth—no small feat and a testament to the hard work and dedication of the whole group,” said Al Panlilio, chief revenue officer of PLDT and president of Smart Communications.
Data and broadband revenues led the growth in service revenues, reaching P90.8 billion, up by 18 percent year-on-year, with mobile internet and Home broadband rising 31 percent and 14 percent, respectively.
“As we enter the fourth quarter of what has been an extraordinary year, we are fortunate to be where we are,” said Pangilinan.
“We expect revenues to continue to rise i the fourth quarter . We’re forecasting better numbers for 2021,” Pangilinan said.
He said the company was posed to surpass last year’s core income with service revenues at an all-time high.