Beer giant San Miguel to become mobile operator

Asia Pacific brewing giant San Miguel Corporation (SMC) is planning a sideways step into the telecoms space by becoming a mobile operator in its home country of the Philippines next year.

The firm, which has been brewing beer in the south-east Asian nation since 1889, will enter a market dominated by Smart Communications, a subsidiary of the Philippine Long Distance Telephone Company (PLDT).

Smart now has around 70 per cent of the market, having acquired Digital Telecommunications Philippines, which owns the Sun brand, back in 2011.

The rest of the market currently belongs to Globe Telecom, potentially leaving room for a disruptive third party to come in and offer high quality low cost services.

The news was first aired earlier this month by local site Inquirer Business, but confirmed in a letter sent by SMC to the Philippine Stock Exchange (via TechInAsia).

For a firm that has made its fortune in food and beverage, San Miguel is remarkably tech-friendly, having already acquired Liberty Telecoms Holdings back in 2009.

However, that part of the business is apparently set to focus on broadband provision under the Wi-Tribe brand.

Challenges facing new entrants in the Philippine mobile space include the risk of damage to infrastructure from typhoons, flooding and other natural disasters.

Typhoon Haiyan, which hit earlier this month, was an extreme example but illustrative of the kind of problems that can occur with telecoms still struggling to recover in the worst hit areas.

The Philippines also has the lowest smartphone penetration of any country in Asia Pacific at just 15 per cent, according to a recent report from market watcher Nielsen. ®