PLDT is a regional leader in mobile financial services and “mobile wallets” with considerable experience in launching such services in countries with low banking penetration
By Arno Maierbrugger/Gulf Times Correspondent/Bangkok
Philippine Long Distance Telephone Company (PLDT) the country’s largest telecom, Internet and media conglomerate, in a surprise move on August 7 acquired 10% of Germany’s biggest and richest Internet incubator and investor Rocket Internet, joining Qatar’s Ooredoo which has entered a partnership with the Germans just a few months ago. PLDT, which will pay $445mn in the deal, said it plans to jointly develop online and mobile payments systems and technology for emerging markets.
The acquisition makes PLDT the second Asian investor behind Ooredoo that believes in Rocket Internet’s business model of launching Internet and e-commerce services in emerging markets and quickly executing online strategies that worked well elsewhere. The German incubator, founded in 2007 and known for its aggressive approach towards investments in startups and entrepreneurial projects, is today present in more than 50 countries globally with around 75 ventures, among them online fashion retailer Zalora, e-commerce platform Lazada, property site Lamudi, car listing site Carmudi, EasyTaxi and fooDPAnda in Southeast Asia. The company employs some 20,000 people worldwide and registered a turnover of $930mn in 2013.
Together with Ooredoo, Rocket Internet in April this year launched Asia Internet Holding, a joint-venture between the Germans and the Qataris with $410mn to spend on regional startups in 15 emerging economies in Asia and Asia-Pacific, among them the Philippines, Thailand, Myanmar, Malaysia, Singapore, Indonesia, Vietnam, Pakistan, as well as Australia. PLDT’s engagement and its focus on online and mobile payment seems a perfect fit for this expansion drive. Most Rocket Internet-backed startups in the region revolve around e-commerce and marketplaces, and thus the company says it sees numerous and significant growth opportunities in financial services across its portfolio. This is especially true for markets underserved with banks and financial services such as Myanmar and rural parts of the Philippines where mobile payment solutions have a very strong market potential.
Myanmar, for example, where Ooredoo just recently launched the first-ever private mobile phone network, is a key country to provide mobile money solutions, and Ooredoo has already kicked off an initiative to introduce its own mobile money solution. Whether Ooredoo will partner with PLDT for local technology solutions remains unclear yet.
PLDT, on the other hand, is a regional leader in mobile financial services and “mobile wallets”, having considerable experience in launching such services in countries with low banking penetration. According to the company, its subsidiary Smart Communications handled global transactions at a value of at about $4.5bn in 2013 through its mobile money system, which includes Smart eMoney, a global mobile payments platform of Mastercard that also works with Citibank and Visa.
“We believe in the powerful synergies between e-commerce and mobile payments, particularly in developing economies,” said Napoleon L Nazareno, President and CEO of PLDT, when the partnership with Rocket Internet was announced.
Increasing disposable income and growing Internet penetration will be the key driver for Rocket Internet and its new partners in Asia. Together with aggressive business execution and quickly adopted technology it is not impossible to reach its envisaged target of becoming the future e-commerce market leader in Asia in a few years’ time.
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