Japanese Company Acquires Guam Broadband Provider

admin's picture

Competition between telecommunications providers waning

By Gaynor Dumat-ol Daleno

HAGÅTÑA, Guam (Pacific Daily News, Aug. 31, 2012) – Guam's competitive telecommunications industry is seeing further consolidation with a Japan-based telecom giant's agreement to buy the island's lone cable TV service provider.

NTT DOCOMO, the parent company of Guam-based DOCOMO Pacific, is buying MCV Guam Holding Corp., which does business as MCV Broadband.

"We have signed an agreement with MCV shareholders to acquire MCV Guam Holding Corp.," stated Eijun Tanaka, Tokyo-based public relations manager for NTT DOCOMO Inc.

"We are planning to release more information following FCC's approval," Tanaka emailed yesterday in response to the Pacific Daily News' questions.

Neither side of the transaction is talking at this point about how this acquisition would affect MCV's tens of thousands of customers who have seen the company evolve from being strictly a cable TV business to one that offers digital movies and programming as well as phone service.

If the transaction does get local and federal regulators' approval, it would make DOCOMO Pacific a one-stop place for cable TV, phone and online service.

Another phone and Internet company, GTA TeleGuam, offers digital TV service, but not via cable.

A third major Guam telecom company, IT&E, recently launched a service which allows customers to view movies and TV programs through a wireless broadband service called 4G LTE. DOCOMO yesterday launched its own 4G wireless Internet service.

DOCOMO Pacific's public relations manager, Anthony Corn, said the company has led market share for mobile phones on Guam.

"Our subscriber base is approximately 65,000," he stated.

The Guam Public Utilities Commission probably will review the proposed acquisition much like its scrutiny of the sale of Guam Telephone Authority, formerly owned by the local government, to a private investment group, said Sen. Tom Ada, who has legislative oversight over utilities and infrastructure. A message left with PUC was not returned as of press time yesterday.

Shamrock Capital Advisors, a California-based private equity firm founded as the Roy E. Disney Family investment company, and GE, provided funding to buy what is now GTA TeleGuam for $150 million in 2004, Pacific Daily News files state.

"When GTA was bought out, it still had to go through with (Guam Public Utilities Commission), and some matters did come under the oversight of FCC," Ada said.

NTT DOCOMO's entry into the Guam market began when it bought GuamCell, SaipanCell and HafaTel for about $71 million in 2006, FCC documents show. DOCOMO has about 50 million subscribers in Japan, according to FCC information.

Part of what the FCC reviewed in the purchase of GuamCell and HafaTel was whether it would create an anti-competitive environment or result in a monopoly. Ultimately, the FCC ruled that there's enough competition in Guam's telecommunications industry to ensure public interest, including competitive pricing, is protected.

"When this will come under scrutiny, you want to make sure there is competition in the field and not just one big giant eating up" other competitors, Sen. Ada said.

Ada said because of the competitive nature of the island's telecommunications industry, Guam consumers have benefited from reduced prices and better products and service.

"We should let competition take its course," he said.

The local telecom market started to change after government restrictions began to relax and as technology evolved. In 2004, GTA's privatization freed it from a restriction that kept its business from expanding beyond landline phones.

Guam's telecom also drew interest from international investors other than DOCOMO.

In 2008, PTI Pacifica bought IT&E for an undisclosed sum and the IT&E brand after the acquisition.

The Delgado family from the Philippines primarily owns PTI. Japanese business giant Sumitomo Corp. bought a $25 million stake in PTI, according to PDN files.

At DOCOMO in Japan, partner NTT once had Japanese government ownership as the former Nippon Telegraph and Telephone.

MCV chief executive officer Craig Thompson confirmed a few days ago the company was reviewing offers from three potential buyers, and that the company's owner, private equity firm Seaport Capital, had considered selling MCV for some time.

Because of the nature of Seaport Capital, Thompson said, it was just a matter of time before the private equity firm made the decision to begin opening itself up to suitors.

Seaport Capital bought 90 percent of United Micronesia Development Association's stake in MCV in 2005.

Rate this article: 
Average: 4 (11 votes)

Add new comment