Senate says PLDT-Digitel deal up to NTC

MANILA, Philippines - Sen. Ramon Revilla Jr., chairman of the Senate committee on public services, said he and his colleagues decided that the Smart-Sun merger does not need congressional approval after almost an hour of executive session.

MANILA, Philippines -  The Senate will let the National Telecommunications Commission (NTC) resolve the ongoing feud between the two telecommunication industry giants Globe Telecoms and Philippine Long Distance Telephone (PLDT)-Smart over the latter’s P69-billion deal for the acquisition of Digitel’s Sun Cellular.

“Regarding the PLDT-Digitel, we will be coming out with a committee report tomorrow. As far as the discussions of the members of committee are concerned, we do not see any problem (regarding the acquisition),” Revilla told reporters.

Revilla said the deal does not need congressional approval, and it is now up to NTC to look into the concerns raised by Globe and other parties.

“We are leaving the matter for the NTC to resolve and make sure that everything will be fine among the telcos and of course, the protection of our consumers will be the primordial concern,” Revilla said in Filipino.

When the Senate committee on public services conducted its second public hearing yesterday, Sen. Joker Arroyo, former public services chairperson, reiterated that Congress could intervene because the common good of the public is involved.

Arroyo, however, noted that reluctance of telecom executives when asked bluntly if they wanted the NTC, and not Congress, to interfere.

He also wanted to know if there is a transfer by any means between the share swap of the two companies.

Digitel senior vice president of legal services and corporate secretary William Pamintuan told the Senate that there is no change in the controlling interest of Digitel as result of the deal. 

Sen. Juan Miguel Zubiri has stressed that the deal does not need congressional approval, a stand he had when he was still congressman a few years ago and when he was then chairman of the House committee on public services.

Senate President Juan Ponce Enrile had expressed his opinion that the matter should be left to the NTC.

“This is just simple acquisition of shares of stocks by another company. Question: Is this prohibited under the law. The acquirer has no limitation, it can acquire. But the seller must get the permission of Congress to transfer to somebody the controlling interest (of the) company owned by him. The question is: does this rule apply to Digitel?” Enrile said.

“Why should limit the transfer of the shares of Digitel… unless they have changed the concept of mergers over the years,” Enrile asked.

“Now, the question here is: Is this transaction detriment to the public?” Enrile said. “I have to be very careful in accepting the word of a competitor, of course, they don’t want them to become big because they want to be bigger. Globe tried to acquire the assets first, but unfortunately, they are not gamblers. Until somebody came, and said, no more negotiations and I’ll buy you at this price, and they accepted it,” he added.

Enrile also lashed at Globe executives for erring about the deal when they had the first opportunity to buy Digitel.

“If those guys bought the assets, they won’t be here to complain. And I do not want this Congress, this Senate to be taken for a ride by anybody,” Enrile said.

Senate Minority Leader Alan Peter Cayetano joined his colleagues in leaving the matter to NTC.

Need for Anti-Trust Law

Enrile said the problems raised by the two telecom giants highlighted the need for the passage of the Anti-Trust Law.

“The difficulty here is we don’t have any law. Walang batas, that’s why we are here to hear this, I suppose in aid of legislation. We have a law but it’s a toothless law, that’s why we have a pending anti-trust law,” Enrile said.

During the same hearing, telecom executives also manifested their intent that the issues be resolved by the NTC. 

Lawyer Rodolfo Salalima, counsel of Globe, told the committee that the matter of congressional approval would have to be finally decided by lawmakers themselves.

“But I was looking into the franchise of both PLDT and Digitel, and one thing significant about these two franchises compared to the franchise of Islacom, is that there is expressed whether there are deals involving stocks war, the same is exempted from the approval of Congress,” Salalima said.

The PLDT-Smart group had referred to the acquisition of Islacom by Globe a few years ago, which did not require congressional approval.

Rey Espinosa, legal counsel of PLDT, noted that Congress has provided exceptions in the past, which he discussed in the context of providing telcos with “equality” under the National Telecommunications Act of 1995.

“This has to do with the franchise of Eastern Telecoms, there were exceptions that Congress see as deem fit at that time to include these exemptions,” Espinosa explained.

Espinosa cited the equality clause under the Telecommunications Act of 1995, which was introduced by Congress, precisely to level the playing field among players.

NTC Commissioner Gamamiel Cordoba had refused to give categorical answers on how they see the differing views of the two warring telcom giants.

“As I have mentioned in the last hearing, when Congressman (Teddy) Casiño filed a petition against PLDT, it was one of the issues that were raised. It is pending before us, and we would want to hear first the evidence and matters that will be brought to our attention during the hearings so that we can make a decision on that matter,” Cordoba said.