Manila—(PHStocks)—Philippine Long Distance Telephone Co. (PSE: TEL) and Rocket Internet AG (Rocket, ISIN DE000A12UKK6, RKET), have announced a new joint venture to further strengthen their existing partnership and to foster the development of internet based businesses in the Philippines.
PLDT and the Asia Pacific Internet Group (APACIG) will become partners in the new Philippines Internet Group (PHIG), which will concentrate on creating and developing online businesses in the Philippines. Through Voyager Innovations Inc. (a wholly-owned subsidiary of Smart Communication Inc., which in turn is also wholly-owned by PLDT), PLDT is investing €30 million for a 33.3 percent stake with an option to increase this to 50 percent. The remaining shares are held by APACIG, which is 50 percent owned by Rocket.
Following the successful model of Rocket’s four existing Regional Internet Groups, PHIG will leverage local market and business model insights, facilitate commercial, strategic and investment partnerships, enable local recruiting and sourcing and accelerate the rollout of online startups. It will drive the activities of high-growth companies which are already operating in the Philippines like Lamudi, Carmudi, Clickbus and Pricepanda, and aims to launch numerous new companies in the coming quarters.
For PLDT, this marks a milestone in its strategy to increasingly invest in businesses that provide digital growth opportunities and develop new revenue streams. This is supported by increasing disposable income and internet penetration – key drivers for eCommerce growth – in the Philippines where a vast majority of mobile subscribers are tech-savvy and open to alternative payment systems for their daily purchases.
Napoleon L. Nazareno, President and CEO of PLDT, said: “At PLDT, we are firmly committed to paving the way for the country’s digital future. We have already built the Philippines’ most extensive internet infrastructure. Now we are excited to extend our partnership with Rocket Internet and look forward to harnessing their knowledge and experience in building innovative internet services that will further support our mission of enriching our people’s lives.”
Oliver Samwer, Founder and CEO of Rocket Internet, added: “With a population of about 100 million people and more than 44 million internet users, the Philippines is a highly promising market. We are glad that with PLDT, the Philippines’ number one telecom operator, we have a strong investor on board with deep local expertise and the infrastructure to best serve customer needs. Our strategic partnership will accelerate the development of the Philippines Internet Group as the country’s leading online powerhouse and help our businesses succeed.”
The transaction is subject to the approval of the regulatory authorities and is expected to be concluded in the first quarter 2015.