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
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