Regulator to review PLDT takeover of Digitel amid monopoly concerns

1 Apr 2011

The Philippines’ telecoms watchdog the National Telecommunications Commission (NTC) has said it will review the proposed acquisition by Philippine Long Distance Telephone Company (PLDT) of JG Summit-owned telco Digital Telecommunication Inc (Digitel) amid concerns about a possible monopoly situation emerging. The regulator’s deputy commissioner Carlo Jose A Martinez said that the agency is still waiting for a formal notification of PLDT’s desire to buy Digitel, but that in the meantime: ‘We still have the right to review the sale whether to approve it or not [as the sale] may improve telecoms services or, the other way around, maybe it can affect the consumers – prices can go up. That’s why the NTC is here to review the sale to protect the consumers.’ PLDT, the nation’s largest telco by subscribers and revenues, hopes to compete the acquisition of a 51.55% stake in Digitel by 30 June, after securing the go ahead from the NTC, the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE).

One potential sticking point, Martinez says, could involve the number of mobile frequencies PLDT would hold as a result of the takeover. If completed, the enlarged entity would hold three frequencies for 3G telephony (PLDT already holds 3G licences for its Smart Communications and sister firm Red Mobile’s operations) versus one frequency for the next largest Filipino operator Globe Telecom. This frequency allocation issue, Martinez said, is the primary consideration for reviewing the sale.

Philippines, Digital Telecommunications (Digitel)