FVR warns of PLDT-Digitel deal impact on public

Former President Fidel V. Ramos warns that the acquisition of Digital Telecommunications Philippines Inc. (Digitel) by telecommunications giant Philippine Long Distance Telephone Co. (PLDT) may result in a disservice to the public, noting that the deal is meant to primarily stifle competition in the telecommunications industry and not to improve service.

In a forum organized by the Ramos Peace and Development Foundation (Rpdev), which is chaired by the former president, and the TA Trade Advisory Group, headed by former Tariff Commissioner and past president of Philippine International Trading Corp. Anthony Abad, Ramos cited the need to level the playing field in business to attract foreign capital, managerial expertise and technology, as well as accelerate development.

“The matter of leveling the playing field as well as capability that will all add up to prosperity is like arithmetic. But one plus one should be equal to not two, but three or five or 11 even, because that is exponential. But what happened here is one plus one equals zero. It is a gobbling-up process to eliminate the opposition. That should not be. What we all want is a better future and a higher level of respect and even admiration for the Philippines,” said Ramos.

It was during Ramos’ presidency when Republic Act 7925, or the New Telecoms Policy Act, was passed in 1995. Under RA 7925, the telecom industry in the country is to be de-monopolized and liberalized by allowing more players to enter and compete in the telecom service under the spirit of deregulation or less stringent regulations.

“The de-monopolization of PLDT has not only made our country the world’s ‘texting’ capital with a daily volume of short-electronic messages larger than all of the entire European Union and enabling the 10 million Filipinos overseas and their families at home to be in constant touch. It has also made the new call centers and business process outsourcing industries the new drivers of our economy today,” Ramos said.

In March, PLDT announced it would acquire a 51.55-percent stake in Digitel for P69.2 billion from its parent firm, JG Summit Holdings. The closing of the deal was set for Aug. 26, 2011, pending approval of the National Telecommunications Commission (NTC). It had been moved twice from the original June 30 closing date, due to opposition from several stakeholders.

Philippine Daily Inquirer
http://business.inquirer.net/14863/fvr-warns-of-pldt-digitel-deal-impact-on-public

Gov’t to call Manuel V. Pangilinan’s bluff

The government has called Manuel V. Pangilinan’s bluff, saying it was unlikely that a decision on the Philippine Long Distance Telephone Company’s acquisition of Sun Cellular would be issued this month.

The Aquino administration will decide on the merger of PLDT and Digitel at its own pace and will not be pressured by the “self-imposed’’ deadline set by Pangilinan, presidential spokesperson Edwin Lacierda said on Thursday.

Aug. 26 deadline

“As far as I know, we did not impose a deadline on ourselves. So we are studying (the deal) carefully, judiciously. And again, correct me if I’m wrong, as far as I know it was a deadline imposed by Mr. Pangilinan,’’ Lacierda told reporters.

Pangilinan, chair of PLDT, had earlier warned his group would walk away from the P74.1-billion deal if it failed to get government approval by Aug. 26.

But National Telecommunications Commission (NTC) Commissioner Gamaliel Cordoba on Thursday said the regulator was still studying all aspects of the transaction, wary of the consequences a merger of two of the country’s major telcos might have on consumers.

“We wish to point out that our current review is still within the first month of the 90-day period within which the commission is required by law to evaluate and decide upon petitions,” Cordoba told reporters on Thursday.

At NTC’s mercy

Sought for comment, PLDT regulatory affairs head Ray C. Espinosa could only say: “I suppose we are at the mercy of the NTC.”

Lacierda said the NTC was in charge of resolving the issue but acknowledged that President Aquino was “looking at the merger also.’’

“(The President) is interested to know the consequences or repercussions, that’s why it has to be studied,’’ he said.

Earlier this week, the NTC said its main consideration would be the interest of consumers. PLDT’s chief rival, Globe Telecom, which has opposed the deal, has argued that the merger would lead to a virtual monopoly of the telecom industry that the government must do all it can to stop.

PLDT currently controls about 55 percent of the local telecom market. Once it takes over Sun Cellular’s operator, Digitel Telecommunications Philippines Inc., the group will corner about 70 percent of industry revenues.

Globe has also asked the NTC to strip PLDT of some of its radio frequencies. These frequencies should then be awarded to Globe, being the only carrier with the resources to challenge a combined PLDT-Digitel entity, Globe contended.

Coverup

In its defense, PLDT said its acquisition of Digitel would create operational synergies that would lead to better services at lower prices, benefiting consumers.

PLDT lashed out at Globe, saying its demands were mere attempts at getting additional frequencies to cover up the company’s inefficient use of its existing assignments.

“(PLDT) has been the most efficient in using radio frequencies assigned to it… Globe is asking the government to punish the most efficient operator and to reward the most inefficient,” PLDT said in a separate statement.

The Senate committee on public services earlier this month ruled that PLDT’s acquisition of Digitel was legal, and that the country’s current regulatory environment ensured that industry competition remained healthy no matter how big individual players got.

But Sen. Joker Arroyo said the Digitel acquisition should not be approved until PLDT complied with foreign ownership restrictions under the Constitution.

By Christine O. Avendaño, Paolo G. Montecillo
Philippine Daily Inquirer

Digitel may resume price war 'onslaught' if PLDT buyout fails

MANILA, Philippines - There may be good news for cell phone users if Philippine Long Distance Telephone Co.'s bid for John Gokongwei's Sun Cellular is scuttled as early as today: lower cell phone charges.

Sun, which Gokongwei controls through Digital Telecommunications Philippines Inc., entered the market in 2003 and ramped up the price wars, forcing PLDT and Globe Telecom Inc. to match its packages, capping all their profits. In March, PLDT and the Gokongwei group announced PLDT would buy Digitel in a P69.2 billion deal. While PLDT said it wouldn't cancel Sun's packages, most observers predicted competition would cool off.

But today is their third deadline for closing the deal. They haven't been able to close because the National Telecommunications Commission hasn't approved the deal, in part due to objections from Globe Telecom Inc. Presidential spokesman Edwin Lacierda on Thursday said the government has not yet finalized its own position on it. PLDT Chairman Manuel Pangilinan reiterated on Thursday there would be no more extensions.

"Digitel may want to begin its onslaught on margins again but honestly there's a limit to how low one can go,'' said Rico Gomez, a fund manager at Rizal Commercial Banking Corp.

"Assuming the merger is off, then Digitel reverts to cut-throat competition,'' said a stock broker who declined to be identified, adding that Globe will probably not try again to buy Digitel -- information which emerged during hearings on the transaction -- but that a company like San Miguel Corp. might. The food and beverage giant is diversifying by buying oil refiner Petron, state power assets, and it also invested in infrastructure projects and and smaller telecommunications companies.

"I don’t think Globe will want to step in, having seen the premium PLDT offered,'' the broker said. "Maybe someone like San Miguel might be interested in Digitel as San Miguel still has telco ambitions.''

JG Summit executives declined to comment. PLDT officials didn't immediately reply to messages seeking their comment.

Winners and losers

A scuttling may favor Globe, the No. 2 player, more than PLDT, already the industry leader.

"I think, ultimately, it’s a major positive for Globe, because of the favorable implications on the long-term competitive landscape,'' said Jun Tarrobago, a fund manager at ATR-KimEng Asset Management Group. "It’s more status quo for PLDT.''

An analyst at a foreign-owned brokerage said none of the players will benefit if the deal, which was perceived to reduce the intensity of competition, isn't completed.

It will be "negative for all,'' according to the analyst. This includes JG Summit Holdings Inc., through which the Gokongwei group controls Digitel.

"Investors' perception is that this is a great deal for JG Summit and Digitel,'' the analyst said. "JG Summit 'unlocked' value for Digitel via the transaction, converting shares in Digitel, an illiquid stock to PLDT, which is liquid and has a high dividend yield, at above market price valuations. The transaction also meant JG Summit would no longer have to bear the capex burden associated with Digitel.''

"The removal of the No. 3 player (Digitel) was seen to be the catalyst for more rational pricing in the industry and an eventual return to growth. No transaction means none of the above happens. I'm not sure though how much of the above factors have been priced in by investors.''

The research head of a local brokerage said PLDT and Digitel shares may take a short-term hit.

"Short-term downsides might initially be felt by PLDT and Digitel as those expecting for the merged entity might express their disappointment,'' the research head said. "After this, both might retain their status quo since Sun, for one, is known as the low-cost provider for both prepaid and postpaid categories. Some funds might favor Globe.''

By Coco Alcuaz, ANC
Posted at 08/26/2011

Senate panel upholds PLDT-Digitel deal

The Senate committee on public services has upheld the Philippine Long Distance Telephone Co.’s planned acquisition of Digital Telecommunications Philippines, saying it is consistent with its legislative franchise and in the interest of the public.

In a 12-page report submitted by chairman Sen. Ramon Revilla Jr., the committee recommended the early enactment of a comprehensive anti-trust law that would "clearly define, prohibit or regulate monopolistic and unfair trade practices."

Among those who concurred with Revilla’s committee report were Senate Majority Leader Tito Sotto, Edgardo Angara, and Miguel Zubiri, who has since resigned.

Joker Arroyo, in his dissenting opinion, suggested the committee hold any action in abeyance until PLDT complies with a Supreme Court ruling for the telecommunications firm to correct its ownership structure.

The report said the transaction involves the acquisition by a duly enfranchised telecommunications company, PLDT, of a controlling interest in another duly enfranchised telecommunications company, Digitel.

"The transaction is, therefore, in pursuit and furtherance of the businesses and operations contemplated under the respective legislative franchises of PLDT and Digitel, hence the same does not require the approval of Congress."

The purchase of the controlling interest in Digitel from the Gokongweis’ JG Summit Holdings is worth about P69 billion.

The deal is awaiting approval by the National Telecommunications Commission.

The Senate report said the deal does not result in a business combination of restraint of trade and that although the constitutional mandate is that a monopoly is not prohibited, it is "regulated when public interest so requires."

The report further said that there is no comprehensive anti-trust legislation in the Philippines.

"The laws (RA 7935 or the Public Telecommunications Policy Act of the Philippines and the Revised Penal Code) did not define clearly the conditions necessary for an economic activity to be considered a monopoly, unfair competition or a combination in restraint of trade."

"Acquisition, merger and consolidation (of telecommunications companies) have become a natural phenomenon worldwide given the peculiarly fast-paced and rapidly evolving global and technological advances in this age of heightened demand, competition and ultra-modern information technology," it added.

With the share-swap deal, Sun Cellular has committed that it will continue providing the services it has provided before the share-swap deal. In fact, Sun Cellular committed that its unlimited voice and text services will become bigger and include a wider coverage, the report said.

The Senate also urged the NTC that, in reviewing the deal, it "must see to it that the same shall not be used in any way to thwart the benefits that must inure to the benefit of the consuming public."

Businessman Manuel V. Pangilinan earlier threatened to junk the deal with Digitel if PLDT does not get regulatory approval by August 26.

BY JP PEREZ
Malaya Business Insight
Source URL: http://www.malaya.com.ph/aug24/busi7.html

Brinkmanship

How serious is businessman Manuel Pangilinan with his threat to shelve the controversial merger between his Philippine Long Distance Telephone Co. and the Gokongwei-owned Digital Telecommunications Philippines Inc.?

No one knows for sure at this point. But it is becoming increasingly clear that the tycoon’s patience is running short with the slow action of the Aquino administration, in general, and the National Telecommunications Commission, in particular.

The completion of the P69-billion deal for 51 percent of Digitel has already been moved twice (by a total of two months), with the NTC taking its sweet time in ruling on the time-critical issue.

Of course, word on the street is that that regulators—along with Malacañang—are favorably inclined to grant at least some demands of Ayala-controlled Globe Telecom Inc., including possibly stripping the merged PLDT-Digitel entity of one previous radio frequency (making the merger less palatable and, in a way, more expensive).

There is also the issue of PLDT’s famous dividend payout (70 percent of core earnings, minimum), which is being held up by the lack of clarity on just what the final ownership structure will look like.

In any case, expect the exasperated MVP to come back with a vengeance—either in the telecommunications industry or in his other concerns—if he does, indeed, decide to move on from this deal with the Gokongwei group (which may have to rethink its financial plans if the merger falls through)

— Daxim L. Lucas

Source URL: http://business.inquirer.net/14121/biz-buzz-%E2%80%98twisting-the-truth-%E2%80%99-again

PLDT may drop Digitel acquisition if regulatory approval not secured 26 Aug

Philippines telco has new deadline to close its acquisition of rival player.

Philippine Long Distance Telephone Co. may call off a deal to acquire rival Digital Telecommunications Philippines Inc. if it fails to secure regulatory approval for the transaction by August 26, the new deadline to close the deal, PLDT Chairman Manuel Pangilinan said Thursday.

The PHP74.1 billion ($1.7 billion) deal was originally expected to close on June 30, but that deadline was moved to July 30 to allow regulators extra time to hear complaints over the impending merger between PLDT and Digitel, particularly from rival Globe Telecom Inc. A new deadline was set for late this month because some issues are still being discussed by the National Telecommunications Commission.

"We have extended that (deadline) until the 26th of August and if nothing would happen by that time, then maybe we will just call it a day," Pangilinan told reporters."We will just move on and Digitel can move on as well and all of this hullabaloo will just die down."

Pangilinan has described the proposed merger with Digitel as a "game changer" for the local telecommunications industry since it will create a company that will hold more than two thirds of the country's cellular subscribers.

"If it's not meant to be then it's not going to happen. Let's move on. PLDT won't die because of it," he said.

By Cris Larano, Dow Jones Newswires

Thursday 18 August 2011

MVP: PLDT-Digitel deal off if NTC OK not secured by Aug. 26

Philippine Long Distance Telephone Co. (PLDT) will drop its acquisition of a 51.55 percent stake in Digital Telecommunications Philippines Inc. (Digitel) if the National Telecommunications Commission fails to approve the deal by August 26, according to its chairman.

"Kung wala pang mangyari siguro we will just call it a day na lang. Matagal na. We will just move on and Digitel can move on and all of this hullabaloo will just die down," said Manuel V. Pangilinan.

Pangilinan said, however, that he could not speak for J. G. Summing Holdings Inc., the seller.

PLDT and JG Summit have extended until the end of this month the closing date for the P69.2 billion transaction. The original date was June 30.

PLDT struck the deal with J.G. Summit in March.

"I’m just reflecting my view, I can’t speak for JG Summit, but yun lang ang personal feeling ko na siguro masyado nang napakaraming gusot at napakasalimuot na ito. Look, kung hindi pwede hindi pwede. Let’s move on," Pangilinan said.

He added that both PLDT and Digitel will not collapse if the transaction will not push through.

Pangilinan also said that it is the prerogative of J.G. Summit if it wishes to sell Digitel to another telecom company.

Digitel, No. 3 in the industry, earlier said second-ranked Globe Telecom offered to buy a majority stake in the company.

Pangilinan had said that the regulatory process, which started in early April, has taken longer than the company had expected.

PLDT said the transaction is not anti-competition nor is it in violation of any existing law or regulation so as to warrant the disapproval or imposition of additional conditions.

"The transaction is not anti-consumer precisely because it responds to the country’s urgent need for a robust nationwide broadband infrastructure and enhanced yet affordable consumer services." it said.

Once the transaction is approved, Digitel and PLDT will be more cost-efficient via capex optimization, co-location of base station, rationalization of overlapping technical system, bulk purchasing of network equipment, communications devices and other material, PLDT said.

It said the acquisition will increase the capability and better position both PLDT and Digitel to provide higher quality and even more affordable services to fixed line, wireless, and broadband subscribers – from voice to SMS, data, Internet and video services.

Besides Globe, Eastern Telecommunications Philippines Inc., Sealand Telecommunications Inc. and consumer groups TXTPower and TXTMate oppose the PLDT-Digitel deal because they said it could hurt competition and the consumers.

Source: abs-cbnNEWS.com

Posted at 08/18/2011 6:27 PM

Agawan-base

Isa sa pinaka-popular na laro ng bata ang agawan-base sa bansa.  Karaniwang laro itong mga nasa elementarya at kadalasang nabibitbit din ito sa maagang yugtong buhay hayskul ng mga bata.

Sa larong ito, dalawang magkatunggaling grupo ng mga magkakalaro ang magkalaban.  Ang unang grupo ay kukuha ng base sa gawing kaliwa ng playground at ang kanan nito ang gagawin nilang outpost.  Ang kabilang grupo ay sa kabilang banda naman ng palaruan at nakaharap ang base nila sa outpost ng unang grupo.  Ang outpost naman ng grupong ito ay nakapwesto sa may harapan na banda naman ng base ng unang grupo.

Isa itong larong habulan.Sa larong ito, ang unang lalabas sa unang grupo halimbawa, ang “prey”.  Bilang sagot, ang lalabas naman sa ikalawang grupo ay “hunter”.  Pero ang hunter na ito ay maaaring maging prey kapag may lumabas na isa pa mula sa unang grupo, and so on.  Ang bawat prey ay kailangang makabalik sa base para makaiwas sa “taga” ng humahabol sa kanya.

  

Maaari ring sabay-sabay na magpahabol ang isang grupo at maaari ring maraming hunter ang lalabas para habulin ang isang prey.

Kapag “nataga” ang prey, magiging “hostage” itong grupong hunter. Ang bawat hostage ay pupunta sa outpost ng grupong nakahuli sa kanila.  Para mapalaya ang hostage, kailangang mahawakan o mahipo sila ng kagrupo nila. Syempre hindi magiging madali yan dahil hahabulin sila tiyak kapag sila ang unang lumabas sa base.

Kapag nahuli lahat ng kasapi ng isang grupo, talo na sila sa laro.

Sounds familiar?  Yes.

Ang unang grupo ay ang PLDT at ang kabila ay Globe. Pareho silang nagsisikap na makahuli ng pinakamaraming hostage.  Ang hostage na yan ay ang telephone frequency ng bansa, isang limitadong pampublikong rekurso.

Sa kasalukuyan, mapapabilis ang pagdami ng hostage ng PLDT dahil sa naka-ambang pagbili nila sa Digitel /Sun.  At dahil wala nang pwedeng maging hostage ang Globe, nag rereklamo sila ngayon.

Ang punto ko ay ito, ang dalawang team na ito ay parehong may pagnanais na makuha ang pinakamaraming hostage.  Sa life cycle kasi ng isang negosyo, natural na tunguhin nito ang pag-accumulate ng excess capital lalo na kung accumulated narin ang kanilang excess income.  At dahil dito, papangarapin nila ang mas malaking excess production na siguradong magreresulta sa mas malaking excess income.  In the end, makokontrol nila ang merkado, ang industriya, at ang konsyumer. Ang tawag dito: monopolyo.

Sa agawang base na ito, ang mga manlalaro ay nag-aagawan ng frequency.  At maaaring sa prosesong laban nila’y may magmukhang pro-people sa kanila.  Pero huwagka, kung sila rin ang mananalo, tiyak pareho rin sa posisyon ng PLDT ang posisyon nila ngayon.

Kaya tama lamang na ipanawagan na i-level ang playing field ng industriya.  Dahil sa dulo nito, sinuman sa dalawang magkatunggaling ito ang manalo, tayo pa ring mga consumer ang talo.