FEF presses anti-trust agency on telco deal

MANILA, Philippines – A group of former and present cabinet secretaries has called on the Philippine Competition Commission (PCC) to immediately look into the P70-billion buyout deal between the country’s top two telecom companies and San Miguel Corp. given its impact on the industry’s competitive environment.

“Considering the implications of SMC’s sale of its telecommunication assets to PLDT and Globe on the competitive environment in the telecommunications industry and on consumer choice in general, we, the Foundation for Economic Freedom (FEF), strongly urge the PCC (to) review the deal immediately and expeditiously and take appropriate action as the facts warrant,” the FEF said in a statement yesterday.

FEF said the PCC is mandated by RA 10667 or the Philippine Competition Act  to implement the national competition policy and prohibit anti-competitive agreements that may prevent, restrict or lessen market competition.

PLDT and Globe Telecom agreed to buy out the P69.1 billion telecoms assets of San Miguel, including the coveted 700 megahertz network.   The move is expected to further cement the  duopoly of  PLDT and Globe.

The group also called on the incoming head of the National Telecommunications Commission (NTC) to review the spectrum allocation for the protection of the consumers.

Apart from this, FEF also asked Congress “to conduct an investigation in aid of legislation and exercise its powers to amend, alter, or repeal the franchises of public utility operators when the common good so requires.”

The group likewise underscored the need for Congress to liberalize key sectors in the economy and lift the nationality restrictions on foreign investments by amending the economic provisions of the Constitution, the Public Services Act, and sector-specific laws such as RA 7925 or the Public Telecommunications Policy Act of the Philippines so consumers can feel the benefits of market competition.

On Monday, PCC said it would look into the transaction of PLDT, Globe and SMC.

“Because of the strong public clamor for faster, cheaper, and better quality internet and mobile services, and that these could be stymied by a lack of competition in the sector, the commission has a keen interest in this proposed transaction. The commission shall assess and take action as appropriate,” the PCC said.

Under the implementing rules and regulations of the newly-formed body,  mergers and acquisitions valued over P1 billion can be scrutinized by the agency if one of the involved companies is listed on the local stock exchange.

The review will take between 30-90 days, depending on the submission of required documents.

A decision will then be made by the PCC if the transaction goes against the competition law.

PLDT chairman and CEO Manuel V. Pangilinan earlier said the telco was open to cooperate with the PCC should the government body look into the transaction.

“Whatever info they need from us in respect with the transaction, we are prepared to provide, subject of course to the consent of Globe and SMC, because they’re all parties. As far as we are concerned, we could be transparent about the transaction itself,” he said.

While the co-use by PLDT’s wireless unit Smart Communications Inc. and Globe of the frequencies assigned to SMC has been approved by the NTC, the regulator has warned it could revoke such if improved internet services are not seen within one year.

“One of the conditions for the approval of co-use is improvement in internet service, broadband and mobile service within one year,” NTC deputy commissioner Edgardo Cabarios said.

Cabarios said the NTC could recall the frequencies or impose penalties should the two players fail to improve their internet service.