PHILIPPINES TELECOM PARTNERS WITH GUAM TELCO

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Cellular phones, landlines included in agreement

By Stella F. Arnaldo Makati City, Philippines (Marianas Business Journal, August 31, 2009) - Globe Telecom, one of the Philippines’ leading telecommunication networks, has signed a partnership agreement with Guam telco, IT&E.

Cecile Mariño, international business development head for North America and Australia for Globe, told the Journal that the agreement "initially" covers cell phone services of both Globe and IT&E, but may offer "all access" services, including landlines, in the near future.

"It [the agreement] covers both inbound calls from Guam and Saipan to Manila under the ‘TipIDD’ service of IT&E, and text messages of Globe subscribers in the Philippines to Guam and Saipan," she said.

In a press statement, Larry Knecht, executive vice president and general manager of IT&E said the agreement will enable subscribers in Guam and the Philippines to stay in touch through cell phone calls and text messaging at rates that are affordable to subscribers in both countries.

"Under this partnership, IT&E is delivering on its commitment to offer relevant services and communications solutions to best serve Guam’s Filipino community. We look forward to the promise this partnership will bring as IT&E introduces more innovative products with Globe Telecom in the second half of 2009," he said.

About 26 percent of Guam’s 178,430-population is composed of Filipinos or are Guamanians with Filipino ancestry.

The partnership agreement between IT&E and Globe was signed on July 7 on Guam. Present at the signing were Knecht and Mariño, as well as IT&E officials Tom Valderrama, marketing manager; Steve Carrara, general counsel and assistant general manager; Joey Mendoza, executive regional director for commercial sales; Reizo Umeda, business strategic planner; and Alan Supnet, Overseas Filipino Communities head for Globe.

Reached via e-mail, Knecht said IT&E decided to pursue the partnership agreement with Globe despite rival Smart Communications being the dominant mobile phone network in the Philippines because "We had some ongoing relationships and we developed some new market offers which we felt [were] a good fit with our company."

But he did not close the door on pursuing a similar agreement with Smart in the future. "We are always open to improve our network to offer more affordable services to our customers." Smart has 38 million subscribers compared to Globe’s 25 million subscribers.

Knecht declined to reveal, however, how much Filipinos on Guam and Saipan spend on SMS/voice call services. "That is classified info due to competitive forces."

Asked why IT&E’s text messaging services are not covered by the partnership agreement, he said, "Our research indicates that the customer concern was Philippine inbound SMS services [to Guam] rather than outbound [Guam to Philippines]."

For now, he said, there are no plans to expand the agreement to cover landline services of both telcos, "but you never know what can develop."

Knecht concluded: "The Philippine community should look forward to seeing more outstanding offers in the future [from IT&E]."

With "TipIDD", Mariño explained that IT&E subscribers can call any Globe and Touch Mobile numbers at a "discount" of 17 and a half cents a minute. This is 12 and a half cents lower than the rates of other Guam telcos according to an IT&E press statement. "All they have to dial is the prefix number 0099 before keying in the Globe number they are calling," Mariño said.

For the SMS or text services, Globe subscribers will be able to send a message to IT&E subscribers for only 50 Philippine centavos (less than one U.S. cent), compared to the prevailing international SMS rate of 15 pesos (31¢) per message. According to Mariño, Globe subscribers have two packages to choose from depending on the number of text messages they want to send and the validity period of the text messaging.

The service is called ITXT and subscribers "can choose from either ITXT 25 which can send 25 messages valid for five days at a cost of 25 pesos (52¢), and ITXT 50 which can send 100 messages good for 10 days at a cost of 50 pesos (US$1.04)," she said.

Globe subscribers can register for the service by sending an SMS, type in ITXT 25 (or 50) then send to the number 888.

For his part, Globe’s Supnet said the "TipIDD" and "ITXT" services complement the Philippine telco’s Globe Kababayan IDD card currently being offered in the U.S. mainland.

"With the growing Filipino population overseas who are in pursuit of a better life for their families here in the Philippines, we made sure that they remain connected with each other despite the distance. This is just the beginning of more tailored-fit products and services that we will continue to offer in the future," Supnet said.

At present, a significant number of Filipino workers on Guam and Saipan buy prepaid phone cards to call their relatives in the Philippines via landline, or use the Instant messaging service of Chikka.com to send SMS from computers or cell phones.

Meanwhile, Globe’s Mariño said the agreement with IT&E is so far, the only one of its kind between Globe and carriers in the Pacific. "It is a partnership on a co-branding and shared marketing program," she said, which is different from the usual international roaming services by most Philippine carriers. "We choose countries with a high concentration of Filipinos such as the United States, the Middle East, Asia and Australia."

She also noted the "significant number of Filipino professionals" and "since we’re targeting Filipinos there [on Guam], it’s important for us to work with a carrier which already understands our consumers."

Jose Ricardo P.R. "Ricky" Delgado Jr. is president and chief executive officer of IT&E Overseas Inc., and his Philippine-based family-owned company, Citadel Holdings Inc., at one time operated Philippine telco Islacom. The latter, which pioneered digital mobile phone services in the Philippines, was bought by Globe, a subsidiary of Ayala Corp., and Singapore Telecom International Pte. Ltd. in 2000.

"So there is some history there between Islacom and Globe. It’s like being back together again," she said.

Globe services include landline, cell phone and broadband Internet. According to a recent investors briefing, Globe profits rose 17 percent in the first half of 2009, to 7.2 billion pesos (US$149 million). A wholly-owned subsidiary of Ayala Corp., Globe is a publicly listed firm on the Philippine Stock Exchange and one of two leading telcos in the Philippines. It had 25 million subscribers at the end of June 2009.

IT&E is the largest telco in the Marianas region, with over 80,000 subscribers on Guam, Saipan, Tinian and Rota. The telco is operated by PTI Pacifica Inc., which is co-owned by Delgado’s Cayman Islands-based Prospector Holdings Inc., and Sumitomo Holdings of Japan.

On May 12, 2009, the U.S. Federal Communications Commission approved the sale and transfer of IT&E Oveseas’ telecommunications assets and licenses to PTI Pacifica.

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