PLDT to kill Sun Cellular, unlimited plans?



PLDT will kill Sun CellularA very popular discussion topic recently among business and tech people alike is the acquisition of Digitel by PLDT. Through the acquisition, Digitel and parent company JG Summit Holdings are basically turning over to PLDT the control of its mobile network subsidiary Sun Cellular.
The question in the minds of current Sun subscribers: what will happen to us? A lot are fearing that Sun’s popular “unlimited” plans will soon come to an end now that PLDT will be running the company.
That fear is valid.
For several years now, Sun’s cheap mobile offerings have severely undercut the pricing and, hence, margins of telco players Smart (owned by PLDT) and Globe (owned by Ayala Corp.). As a result, the two big players struggled to make a profit. Smart and Globe tried to differentiate by offering premium, value-added services such as mobile internet, push email and mobile chat — but these have still not caught on as majority of Filipino cellphone users prefer the traditional texts and calls.
Sun has nothing new to offer PLDT
We believe PLDT will ultimately kill the Sun Cellular brand. Why? To understand this, we need to go back to the fundamental reasons why a company acquires another company.
The primary goal when making acquisitions is to leverage the acquired company’s strength and capabilities or to reach a new market. We don’t see these in Sun Cellular’s case.
Sun does not really have much competitiveness in the telecoms industry. It has remained a far third in the telecoms war in the country, with a subscriber base merely 1/3 of Smart’s 46 million users. For several years, it barely made a dent in the telecoms industry, that is, until the offering of unlimited plans which made people choose Sun as their No. 2 cellphone line. For most Sun subscribers, Sun became the alternative to their primary Smart or Globe line, taking advantage of the unli-plans that Smart and Globe have since copied.
But then again, offering unlimited plans is something Smart would not want to continue. Even Globe thinks the acquisition signals a shift to higher margins, as seen in an internal memo issued to employees yesterday parts of which were published on Inquirer.net:
“PLDT is seen to carry the cost of bringing rationality back to the market by paying for this acquisition and that Globe is seen to benefit from it as profitability remains in a more stable and consolidated market.
We might find ourselves competing in a more rational marketplace with better margins as the new opposition could decide to scale back on the unlimited propositions that undermine industry.”
Globe confirms a shift back to premium pricing and higher margins and “[scaling] back on the unlimited propositions that undermine the industry” is what PLDT wants to achieve with the acquisition.
Another reason a company might acquire another company is to obtain access to specific markets. But then again, Smart’s Red Mobile and Talk n’ Txt brands are basically targeting the same markets of Sun. Thus, we believe, Sun does not really give PLDT anything new.
Coke killed Pop Cola when it acquired the brand
So why acquire Sun? Well, to kill the competition. PLDT will perhaps merge Sun with Red Mobile or Talk n’ Txt and effectively remove the low-cost player in the competition.
Remember Coca-Cola’s acquisition of Pop Cola a few years ago. As the No. 2 player in the Philippine cola market (Pepsi was No.3  then), Pop Cola threatened Coke’s domination. Coca-Cola then decided to acquire Pop Cola from RFM and, a few years later, killed the Pop Cola brand. Proof? If you’re in Metro Manila, you’ll rarely see Pop Cola in stores anymore. Coke’s goal in acquiring Pop Cola was not to gain any competitive edge, it just wanted to kill a powerful competitor in the market.
The Sun will set — perhaps in 2-3 years
Of course, PLDT’s management has recently been on the news proclaiming Sun will keep on offering unlimited plans. We believe them — at least for the short-term. Consumers will surely rage against the phasing-out of unlimited plans, which is why PLDT will have no choice but to continue offering these.
We’re pretty sure, though, that Smart will add a new dimension to this offering, perhaps by bundling premium services to the unli-plans or by using unli-plans to force users to shift to the more lucrative post-paid subscriptions.
Along the way, the Sun brand will gradually be phased out perhaps to be merged with either Red Mobile or Talk n’ Txt — in a move the company will tout as “consolidation” or “rationalization.”
It might not happen this year, but wait 2 or 3 years before the Sun will set.

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13 thoughts on “PLDT to kill Sun Cellular, unlimited plans?”

  1. Profit before people are a curse on humanity. Essential services should be mandatory affordable to consumers. There is a loot in the PH, seen no where else in the world not even in Africa. Chinese businessman have ruined indigenous Filipinos.
    By the way, I’m not a Filipino, i been there and people are really very good and friendly, but the power structure that rules them is as evil as any country on earth. The cost of services in essential services like water, power, mobile etc is way way higher than the income.

    Reply
    • the battle goes on between SMART and GLOBE. Who among them will offer Unlimited Texts, Calls with Unlisurf at lower price(eg. P999 All in) and BETTER SERVICE of 4G LTE will win the War and have the majority of 70 Million Philippine Subscribers.

      Reply
  2. PLDT should not kill SUN,they should take advantage of the brand. they may eventually kill the unlimited,but not the brand.

    Reply
    • PLDT used to have the monopoly of it… they are just bringing back the “those days” that had gone by. So sad for Sun.

      Reply
  3. now this is going to be very very sad. good thing my Sun postpaid will be out of lock in by the time PLDT decides to kill Unlimited Sun plans.

    Reply
  4. Walanghiya naman mayayaman na eh gusto pa ring yumaman. Sobrang pagkagahaman na iyan. Sarap na sanang makatipid. Kahit limited lang ang coverage nationwide, pinagtitiisan mo kasi doon ka nakakatipid tapos ngayon papatayin dahil lang gusto pang magkamalan ng mas malaking kita? Hindi ko talaga maintindihan ang ganid ng mga kapitalistang ito. Diyos ko ilayo mo po kami sa mga gahaman. Sana po dumulas sa kanilang mga poder ang kanilang mga pera at idaloy mo po sa mga may sakit at nagugutom. Sobra na. parusahan Mo na po sila.

    Reply
  5. Walanghiya naman mayayaman na eh gusto pa ring yumaman. Sobrang pagkagahaman na iyan. Sarap na sanang makatipid. Kahit limited lang ang coverage nationwide, pinagtitiisan mo kasi doon ka nakakatipid tapos ngayon papatayin dahil lang gusto pang magkamalan ng mas malaking kita? Hindi ko talaga maintindihan ang ganid ng mga kapitalistang ito. Diyos ko ilayo mo po kami sa mga gahaman. Sana po dumulas sa kanilang mga poder ang kanilang mga pera at idaloy mo po sa mga may sakit at nagugutom. Sobra na. parusahan Mo na po sila.

    Reply
  6. PLDT will not kill the Unlimited plans. The reason for buying Sun was because it was too difficult for Smart to continue to compete with the products of Sun especially the golden egg which is unlimited plans. Now that they bought Sun, without investing on new infrastructure, PLDT will earn more. As such, why would PLDT kill the goose that lays the golden eggs? The combination of network will be the stronghold in this merger. All rumors spreading the death of Sun is just bad talk from Globe because after being defeated by Smart in Prepaid, and being defeated by Sun in postpaid, there is no way Globe will be able to recover. They are even asking NTC to stop the deal. That’s what they get for putting premium prices over functionality and value to customers. they’ve been losing money and will continue to lose more.

    Reply
  7. yeah nice one kill sun cellular! unlimited packages does only traffic and overuse.  ppl should learn how to use the cellphones wisely and effectively not just by making nonsense text. If i would be PLDT it is more beneficial to bring down sun cellular slowly.
    Sun cellular? Unlimited use but limited network hahaha

    Reply

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