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PLDT: Beaten-Down Telco With Dominant Market Presence


Telstra is allegedly planning to enter the Philippine wireless mobile and internet business in 2016.

The bearish mood over PLDT this year will only get stronger due to the rumor that Telstra wants to expand in the Philippines.

Bargain hunters should take advantage of this Telstra rumor to consider adding PHI to their long-term portfolio.

The lingering bearish sentiment over PLDT is a bottom-fishing opportunity. It is a dividend income blue chip ticker with over 6% yield.

Philippine Long Distance Telephone or PLDT (NYSE:PHI) saw its stock price drop by more than 33% this year. This long-time dominant telecom operator in the Philippines has suffered an Oversold status for some time now. However, I do not see PHI's price recovering any time soon.

Aside from the stiff competition presented by Globe Telecom (OTCPK:GTMEY), the noise over Telstra's (OTCPK:TLSYY) alleged plan to expand in the Philippines further aggravates the bearish sentiment over PLDT.


Telstra, Australia's largest telecom operator, intends to spend a billion dollars to try and break the current duopoly of PLDT and Globe Telecom in the Philippines' fast-growing wireless broadband and cellular industry. The upcoming threat from Telstra is partly believable because its local partner will be San Miguel Corporation (OTCPK:SMGBY).

San Miguel is the Philippines' largest beer and food conglomerate. Philippine laws restrict Telstra to a maximum 40% stake in the joint venture with San Miguel Corp. Telstra's alleged ambition to penetrate the Philippine market looks impressive because of San Miguel's pervasive local and national political influence.

Getting the necessary national and local business permits and right-of-way licenses to put up a network of 4G LTE towers is obviously a lot easier with San Miguel Corp. processing them. Industry analysts who cover San Miguel are also aware that it owns Liberty Telecoms Holdings and Eastern Telecom through its wholly owned BellTel Communications subsidiary.

Liberty and Eastern officially owns 80% of the all-important 700 MHz spectrum that could be used for mobile broadband communication. Telstra is an expert in putting up 4G LTE broadband internet network infrastructure using the 700 MHz spectrum.

Buying PLDT While It's Cheap Could Be A Long-term Winner

Brave investors should consider adding PHI to their portfolio right now. It is always great to take advantage of a bearish outlook over a company that obviously will continue to be a dominant player. PLDT's long-term operations in the Philippines is not yet in any serious jeopardy. In my own view, it will take several years before Telstra and San Miguel could roll out a 4G network that is big enough to threaten the duopoly of PLDT and Globe...