CreditSights, a unit of Fitch Group, said Tuesday it foresees no “major regulatory hurdles” to the P6.75-billion acquisition of Sky Cable Corp. by PLDT Inc.
“We don’t anticipate any resistance from the antitrust body as the acquisition effectively involves Sky’s broadband business only, since Sky will terminate its cable TV business as part of the transaction,” CreditSights said in a report.
CreditSights said Sky Cable has a relatively small broadband market share of 2 percent to 3 percent, which should not materially reduce industry competition post-acquisition by PLDT.
PLDT’s Cignal in August 2022 scrapped its bid to acquire a 38.9-percent stake in Sky Cable for P2.8 billion over concerns that the Philippine Competition Commission might block the deal on grounds of anti-competition.
“Such concerns mainly pertained to Sky’s cable TV business, as Cignal and Sky are the two largest cable TV providers in the Philippines with a combined market share of 63 percent to 65 percent,” CreditSights said.
CreditSights said the Philippine antitrust body could prevent M&As “only if they substantially lessen competition,” which could include “M&As that create companies with dominant market power that could potentially lessen, restrict or prevent market competition”.
The PCC earlier said it was watching the developments about the planned takeover of Sky Cable by PLDT for P6.75 billion.
The anti-trust body noted that the previous acquisition plans involving PLDT and Sky Cable did not push through in 2020 and 2022 for various reasons, including PLDT’s own assessment then of possible overlaps with Sky Cable in their products and services.
“We don’t foresee the deal to face major regulatory hurdles with the Philippine antitrust body,” CreditSights said.
CreditSights also said that the acquisition represents a “logical strategic addition” to PLDT’s dominant cash-generative broadband business.
“PLDT can boost its Philippine broadband revenue market share by 2 percent to 3 percent to 47 percent to 48 percent and maintain a comfortable lead over its broadband peers, namely Globe Telecom [31 percent], Converge ICT [21 percent] and other small players [1 percent],” CreditSights said.
“The addition of Sky’s 350k broadband subscribers would expand PLDT’s broadband subscriber base by 9 percent. Through the acquisition, PLDT eschews one of its competitors in the broadband space,” it said.
