040207: Globe, PMSI in talks for mobile TV service

By Lenie Lectura

Reporter

GLOBE Telecom Inc., the country’s second-largest cellular firm, and bankrupt direct-to-home (DTH) satellite service provider Philippine Multi-Media System Inc. (PMSI), are in talks to offer mobile-television service expected to launch this month.   PMSI is the operator of Dream Satellite TV.   A reliable BusinessMirror source said test broadcast with nine channels began in February.   Initially, the mobile TV service from Globe and Dream TV can be viewed on Samsung mobile phones, the source added.   Since mobile TV is essentially a broadcast service, Globe needs to partner with a broadcast entity to actually offer mobile TV.   Rival Smart Communications Inc., the cellular unit of Philippine Long Distance Telephone Co. (PLDT), has partnered with Nation Broadcasting Corp. (NBC), a unit of MediaQuest Holdings Inc., which is a wholly-owned subsidiary of the Beneficial Trust Fund of PLDT.   NBC, which operates a network of radio and TV stations, will actually provide the broadcast service, with Smart pushing its mobile-phone service through marketing and infrastructure support.   PMSI chief executive officer and chairman Cesar Reyes told BusinessMirror in a phone interview that he “could neither confirm nor deny” that the DTH firm is in talks with Globe on this deal.   Globe officials, meanwhile, could not be reached for comment.   The source said that Globe and Dream TV was supposed launch mobile TV on April 16.   However, the financial difficulties of Dream TV is hampering this launching date.   “How can Dream partner with Globe now if the DTH firm is not capable of doing the project?” the source said “Dream TV, just like any entity, should be technically and financially capable of providing DTH service.” PMSI filed for rehabilitation with branch 149 of the Makati Regional Trial Court on March 28, 2007. Two days after, the court issued a stay-order, which allowed Dream TV to suspend payment of its P1.15-billion outstanding liabilities. Dream TV told the court a combination of high- operating costs and low revenues helped spur its financial difficulties.   It owes Mabuhay Satellite Corp.(MSC), a subsidiary of PLDT, P396 million in unpaid rental fees since in August 2003.   According to the proposed rehabilitation plan submitted to the court, PMSI already has a knight in shining armor. Reyes said the company is in talks with Lodestar Investment Holdings Corp. (LIHC), formerly Lodestar Mining Corp., for a possible infusion of fresh capital.   “The company is in discussion with publicly-listed LIHC for the infusion of fresh capital either through a private placement of securities or through a public offering,” said Reyes.   LIHC, for its part, said it is in talks with PMSI for a possible merger and that the board will review the possible effect of the DTH firm’s financial status.   “This development relating to PMSI shall be reviewed by the members of the board of directors of the company to assess its possible effect to the on-going negotiations for the proposed/planned merger of the company with PMSI,” said LIHC corporate secretary Amaya Soriano.   Should discussions with prospective investors fail, PMSI is confident that it will be able to obtain sufficient operating capital either from its current investors or from other sources during initial phase of the rehabilitation period, which spans 12 years, including a three-year grace period.   A repayment scheme of its outstanding obligations covers a period of nine years on equal annual installments.   PMSI said its ability to repay its obligations will depend on the availability of fresh capital during the first few years of the proposed rehabilitation.   “The company will comply with its repayment obligations in accordance with the payment terms and schedule provided for in the said proposed rehab plan if additional operating capital amounting to approximately P107.5 million will be infused as new equity during the initial phase of the rehabilitation,” the company said.   PMSI projects a cash flow deficit this year, which it plans to plug by asking for more advances from shareholders or through fresh equity by issuing unsubscribed common or preferred shares to potential investors or its existing shareholders.   PMSI said management has a plan to improve the company’s operating cash flows and meet its liabilities as they fall due and support its future operations.   The company, according to PMSI, will reduce operational costs by leasing its transponders from another provider at lower rates.

 

http://www.businessmirror.com.ph/04102007/companies01.html