PHILIPPINE Long Distance Telephone Co. (PLDT) on Tuesday bucked a proposal from second-ranked Globe Telecom Inc. for the Department of Justice to intervene in an ongoing hearing on the merits of the market leader’s looming acquisition of Sun Cellular.
“Globe is stepping up the pressure on government so that it will bestow upon Globe, as if as a matter of entitlement, state sponsored concessions which will change the market driven advantages of its rival, particularly PLDT and Digitel,” Ray Espinosa, head of PLDT Regulatory Affairs and Policy said in a statement.
Espinosa said the undue benefit that Globe is trying to extract through a combination of public pressure and political rhetoric flies in the face of the Anti-Graft and Corrupt Practices Act, which prohibits government from giving undue benefit to any private party.
PLDT’s statement came on the heels of Globe’s clamor for the DOJ to investigate and stop the P69.2 billion PLDT-Digitel transaction.
PLDT is about to buy 51.5 percent of Digital Telecommunications Philippines Inc. from Gokongwei-led JG Summit Holdings Inc.
President Benigno Aquino 3rd had ordered the National Telecommunications Commission and other agencies to look into the matter. The President also issued Executive Order (EO) 45, appointing the DOJ as the lead agency that would investigate monopolies and cartel behavior to protect consumers.
“Globe’s latest stunt to take undue advantage of EO 45 is intended to throw the ongoing NTC proceedings into confusion. Globe’s legal counsel is fully aware that EO 45 was not intended to divest the NTC of its jurisdiction and statutory powers as the regulator of the telecommunication sector,” Espinosa however said.
Under EO 45, Justice Secretary Leila de Lima was designated as the country’s “competition authority,” and was mandated to “investigate all cases involving violations of competition laws and prosecute violators to prevent, restrain and punish monopolization, cartels and combinations in restraint of trade.”
Rodolfo Salalima, Globe legal counsel, had said the DOJ should act swiftly to prevent the PLDT-Digitel deal from resulting in a telecom market player so big as to have the power and means to effectively stifle competition.
Salalima said Globe has always warned against the possible return of monopoly as the PLDT-Digitel deal will result in one company cornering the bulk of a very limited spectrum of frequencies.
Jess Sandow, convenor of Samahang Laban sa Monopolyo, said their group is hopeful that EO 45 will effectively guard the economy against the onslaught of monopolistic greed among businessmen while an honest-to-goodness legislation against monopoly is not yet in place.
“With the implementation of measures to promote transparency and accountability in markets, the consumers expect an environment that promotes quality goods and services at prices that are not dictated by unfair trade acts and practices,” Sandow said in a statement.
The group held a picket outside the NTC during the hearing of the merger of PLDT-Digitel.
Besides Globe and SLaM, Eastern Telecommunications Philippines Inc., Sealand Telecommunications Inc. and consumer groups TXTPower and TXTMate are opposing PLDT’s acquisition of Digitel because of the negative repercussions on industry competition and consumer interest.
State-run Philippine Institute for Development Studies earlier said the PLDT-Digitel deal may affect competition because of high entry barriers and the absence of effective competition.
PLDT shares rose to P2,322 apiece on Tuesday from P2,202 last week.
Manila Times
22 June 2011
By Darwin G. Amojelar, Senior Reporter
Source URL: http://www.manilatimes.net/business/pldt-bucks-doj-intervention/
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