Pilipino Telephone Corporation

The Pilipino Telephone Corporation (PSE: PLTL), commonly known as Piltel, is the third-largest mobile telephone service provider in the Philippines. Previously, Piltel was also the fourth-largest fixed-line telephone service provider in the Philippines. Piltel is 92.1%-owned by Smart Communications, a subsidiary of the Philippine Long Distance Telephone Company (PLDT). The remaining 7.9% of Piltel's shares is owned by the Filipino investing public.[2] Piltel recently made an announcement that it is planning to sell its Talk 'N Text subscriber base and GSM assets to Smart for a certain amount. At the same time, Smart is planning to buy out the minority shareholders of Piltel through a tender offer. This is in connection with a plan to change Piltel's main line of business, from a telecommunications company to being a holding company for the PLDT Group's venture into the electricity distribution industry. ^[1]

History

Piltel was incorporated with limited liability on July 18, 1968. It started its business by providing landline services in eight cities and municipalities in the Philippines: Baguio City, General Santos, Olongapo, Subic, Puerto Princesa, Digos, Boac and Masbate.

In March 1991, Piltel started offering cellular phone services branded Mobiline, using the AMPS standard. In August 1993, Piltel launched it paging business called Beeper 150. In July 1995, Piltel had its shares listed in the Philippine Stock Exchange.

By 1996, Piltel dominated the market with 42% market share. However, in that same year, cellular fraud or cloning became rampant in the Philippines. This prompted Piltel to upgrade its AMPS network to the CDMA standard. It was also in the same year that Executive Order No. 109 was implemented, thus, Piltel had to expand its landline services to unserved and underserved areas in southern and western Mindanao.

Unluckily, in July 1997, a financial crisis that started in Thailand spread across neighboring countries in Asia. This, together with rising inflation, the cost of upgrades and expansion, loss of wireless subscriber confidence because of the cloning problem in the previous year, and lack of subscriber interest in the newly installed Mindanao landline network because of the financial crisis; started to weigh heavily on the finances of Piltel.

On top of it, intensified competition started eating into Piltel's wireless market subscriber share. In 1998, competitors using the GSM standard started promoting the use of SMS, which has since become the most preferred communication method of the Filipinos. Before Piltel had the chance to add SMS facilities to its CDMA network, it was already deep into the red with Php4.1 billion worth of losses as of end-1998.

In November 1999, Piltel's management decided to stop investing in its AMPS/CDMA networks and start building its own GSM network. This was done by striking a facilities-sharing agreement with competitor Smart Communications. By April 2000, Piltel launched its GSM brand, Talk 'N Text.

Since then, most of Piltel's employees have been absorbed by Smart Communications. Likewise, the management of its wireless business have also been outsourced to Smart Communications. The Beeper 150 network was already shut down, and its landline business was sold to PLDT in 2008.

As of June 30, 2008, the carrying value of Piltel's GSM network assets amounted to 2 billion pesos.

Subsidiaries

The following are Piltel's wholly-owned subsidiaries:

• Telecommunication Service Providers (Telserv) - Phils : involved in operator services
• Piltel International Holdings Corporation (PIHC) - British Virgin Islands : involved in the issuance of bonds convertible into common shares of Piltel
• Piltel (Cayman) Ltd. - Cayman Islands : involved in bringing into the debt restructuring plan holders of Piltel's convertible bonds

Wireless

Today, Piltel is mostly a wireless services operator. Piltel uses its AMPS/CDMA networks to lease out telephone lines to a few corporate subscribers, and has decommissioned all but six of its AMPS/CDMA cellsites. Piltel also reported 12.48 million subscribers to its GSM brand, Talk 'N Text, as of June 30, 2008, a 56.78% increase in a period of 12 months.^[2]

Philippine area code assignment

Piltel uses the 912 area code for its AMPS/CDMA service. However, it is now used for Talk N Text.

Note: Pilipino Telephone also uses some of Smart Communications' area code assignments for its GSM services due to a facilities-sharing agreement.

Ownership

• Smart Communications: 92.1%
• Public stock: 7.9%

Competition

Piltel's main competitors are Smart Communications, Globe Telecom and Sun Cellular in the mobile market. It previously competed with carriers such as Digitel and Bayan Telecommunications (Bayantel) in the fixed-line market.

Sports

Piltel owns the Talk 'N Text Tropang Texters of the Philippine Basketball Association.

References

External links

Official

• Piltel website
• Talk 'N Text brand site