The Philippine Long Distance Telephone Company (PLDT) and German-based tech firm Rocket Internet AG (Rocket) have created a new joint venture company to create and develop online businesses in the Philippines.
This marks the second joint venture between the two companies. Earlier this month, they had set up a JV for mobile-first payment services in emerging markets.
The latest deal will see the Philippines company own a third in the JV – called Philippine Internet Group (PHIG) – with the option of increasing it to 50 per cent.
PLDT’s investment of 30 million euros or P1.54 billion for a 33.3 per cent stake in JV is routed through one of its units – Voyager Innovations Inc.
Voyager is a unit of Smart Communications Inc, PLDT’s flagship mobile brand.
The remaining shares in the JV will be held by Asia Pacific Internet Group (APACIG), which is 50 percent owned by Rocket. APACIG is a joint venture company established in 2014 as an Internet platform by Rocket and its partner Ooredoo, an international communications company.
Put simply, the deal implies that both parties in the latest joint venture – The Philippine Long Distance Telephone Company and Asia Pacific Internet Group – will become partners in its (PHIG’s) operations.
The transaction is likely to close in the first quarter of 2015.
PHIG is expected to follow Rocket’s four existing regional Internet groups in Africa, Asia Pacific, Latin America, and Middle East. The new online enterprise is tasked to leverage local market and business model insights, facilitate commercial, strategic and investment partnerships, enable local recruiting and sourcing and accelerate the rollout of online startups.
It also will drive the activities of high-growth companies which are already operating in the Philippines like Lamudi, Carmudi, Clickbus and Pricepanda, and aims to launch numerous new companies in the coming quarters.
Oliver Samwer, Founder and CEO of Rocket Internet, described the Philippines as a “highly promising market” with its population of about 100 million people where more than 44 million are internet users. “Our strategic partnership will accelerate the development of the Philippines Internet Group as the country’s leading online powerhouse and help our businesses succeed,” Samwer said.
The relationship between PLDT and rocket stretches back to August last year when the dominant Philippines carrier had bought a 10 per cent in the German firm for 33 million Euro, and this equity stake was subsequently diluted to 6.6 per cent when Rocket went public. But Rocket’s listing also saw the value of PLDT’s stake go up to 419 million euro.