PLDT, Globe attempt to smooth passage in SMC buyout

17 Jun 2016

Telecoms operators PLDT and Globe Telecom have resubmitted documentation to the antitrust watchdog Philippine Competition Commission (PCC), including some additional paperwork which they hope will resolve so-called ‘deficiencies’ cited by the PCC relating to their joint PHP69.1 billion (USD1.48 billion) buyout of San Miguel Corp (SMC’s) Vega Telecom assets. Whilst both telcos maintain their position that the initial applications were valid, Froilan Castelo, Globe general counsel, said: ‘We have resubmitted the documents again to the PCC just to comply with the supposed-to-be deficiency without abandoning our original position.’ The move follows the PCC’s recent decision to turn down the PLDT-Globe application, claiming it was ‘deficient and defective in form and substance’. Meanwhile, PLDT’s head of regulatory affairs Ray Espinosa noted: ‘We are returning the notice that they have returned to us along with certain documents that they have requested. We have properly filed a notice at the earlier time, along with the documents that they are requesting.’

On 14 June CommsUpdate reported the Filipino Senate President Franklin Drilon as saying that the PCC has the power to halt the joint buyout of telecoms assets belonging to SMC, if it considers that the deal ‘would encourage or result in a monopoly’. Local press quoted Drilon as saying that under the Philippine Competition Act, the PCC is empowered to review ‘whether a particular agreement or a particular practice would have monopolistic tendencies,’ where such a deal could ultimately prove ‘prejudicial to public interest and to the expansion of the economy and business’. Commenting on the proposed Vega Telecom transaction, he said: ‘This is now subject to the review of the Philippine Competition Commission to see whether there is a monopoly or duopoly which prevent the coming-in of other players that therefore kill competition.’ PLDT and Globe had earlier insisted that the PCC lacks the authority to cancel their joint acquisition.

Philippines, Globe Telecom (incl. Innove), PLDT Inc. (incl. Smart Communications and Sun Cellular), Vega Telecom