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Lopez’s ABS and MVP of TEL had a CONVERGE vision with Sky Cable but Lopezes failed on execution

Converge ICT (CNVRG) rose from an obscure broadband company based in Pampanga to a national all fiber internet company valued at 300.68 Billion Pesos. Pampanga businessman Dennis Anthony Uy controlled CNVRG with the backing of the US private equity firm, Warburg Pincus.

CNVRG’s commitment is to provide pure end-to-end fiber internet connection – from their network facilities to your home. Ensuring no loss in data transmission or slowdown in internet connectivity. This means greater speed and bandwidth only capable with Optical Fiber wires, all the way.

In 2001 the Sky Cable of the Lopezes merged with Home Cable of MediaQuest controlled by the retirement fund of PLDT (TEL). As declared by MVP, the idea then was to strengthen cable TV as an alternative converged platform for delivering data, voice, and video to the home.

Through series of corporate actions by the Lopezes, ABS-CBN ended with a 59.4% economic interest in Sky Cable. Probably TEL’s MediaQuest still owns 14% to 16% of Sky Cable up to the present.

The vision of making Sky Cable an alternative platform for delivering data to the home didn’t go to scale. The Lopez’s ABS who became the controlling shareholder of Sky Cable failed to fully execute on such vision. The Lopezes could have used Bayantel with substantial fiber-optic assets to make that vision a reality. But they sold Bayantel to the Ayala’s Globe Telecom (GLO).

Now that market of an alternative converge platform of delivering data to the home belongs to CNVRG.

Had Sky Cable became like CNVRG, ABS would not have been in shaky grounds despite the loss of the broadcast franchise. Sky Cable has not been a significant contributor to the bottom-line of ABS though it is padding the revenue.

There is no point for ABS to hold Sky Cable right now. With operating losses eating on its capital, ABS would be better off selling Sky Cable. With Sky Cable gone, ABS could get rid of some debts on its balance sheet. At the end of 2020, ABS showed that Sky Cable had a net asset value of around 12 billion Pesos. Of that 12 Billion around 7.1 Billion is attributable to ABS. That 7.1 Billion could already make a turnaround for ABS.

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