23 Jan 2014
The Court of Appeals in Manila has ruled against an attempt by Smart Communications to block rival cellular operator Globe Telecom from using wireless frequencies belonging to Bayan Telecommunications (Bayan). The court upheld the legality of the so-called Joint Use Agreement which is in place between Globe and Bayan and which allows the former to utilise Bayan’s spectrum holdings. Smart had complained that since Bayan has no wireless operating permit and was unable to use the frequencies then the spectrum should have been returned to the regulator, the National Telecommunications Commission (NTC), and offered up for auction. The court decision said Smart had failed to prove that the joint use of frequencies is ‘contrary to law or is patent and gross as to amount to grave abuse of discretion’.
TeleGeography’s GlobalComms Database notes that in November last year Globe submitted a request to the NTC seeking approval for its plan to take control of struggling fellow operator Bayan. Globe has bought up 98.2% of Bayan’s debt and last October the first tranche of a debt-to-equity conversion process was carried out which saw Globe take a 39% share of Bayan. The second phase is underway which will see Globe’s stake raised to a majority 56.6%. Bayan has acquired 50MHz of 4G-capable frequencies which Globe is keen to utilise itself alongside its own 45MHz of spectrum. Philippine Long Distance Telephone Company (PLDT), which leads the country’s cellular market via its Smart unit, has complained that the deal is ‘anti-competitive’. Smart and sister company Digitel hold a combined 35MHz of 4G frequencies.