RIVALS Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc. again lashed out at each other on Monday, with Globe accusing PLDT of not being transparent, as it had not made public the documents pertaining to its share-swap deal with Digital Telecommunications Philippines Inc. (Digetel).
PLDT said Globe’s opposition is obviously meant to delay the regulators’ approval on the transaction.
During a public hearing at the National Telecommunication Commission (NTC) on Monday, Globe said it filed a motion to intervene and an opposition in intervention on the application for the initial sale and transfer to PLDT of approximately a 51.55-percent equity in Digitel.
PLDT and Digitel are seeking regulatory approval for the transaction, which is expected to be concluded by end of June.
In the motions filed by Globe, the transparency of the PLDT-Digitel deal was questioned because to date, the transacting parties have yet to furnish industry stakeholders with a copy of the sale and purchase agreement.
“Plainly, without the actionable document, there is nothing to be approved. Too, evidence suppressed raises the strong presumption that said evidence is adverse to the suppressors,” Globe said.
Globe noted that PLDT and Digitel had only submitted press releases that “in very broad strokes,” discussed the purchase price and conversion of shares, bonds, and certain debt covenants; however, no details were provided.
“Without the sale and purchase agreement, the public is kept in the dark, and begs the question, ‘What are PLDT and Digitel really up to?” said Globe legal counsel Rodolfo Salalima.
Globe also questioned why the NTC failed to formally inform Globe that there was going to be a public hearing. “We were not furnished a copy of the notice of hearing. That’s why we submitted our motion only last Friday,” Salalima said.
But PLDT said there were no instructions from the NTC to provide Globe—which is not a party to the deal—the documents it was asking for.
“It is quite obvious that its intent is to derail the proceedings,” the PLDT lawyers said. “But we are ready to furnish Globe a copy if the NTC tells us to.”
The NTC, for its part, said it did not have to inform Globe about the scheduled hearing because the notice was publicly issued last week.
Though Globe claims to be asking for a “level playing field” in the telecoms industry by opposing PLDT’s investment in Digitel, a PLDT official said Globe was actually engaged in a campaign to secure for itself “special privileges” from the government.
“By raising the false issue of monopoly, Globe wants the government to give it free radio frequencies —at the expense not only of PLDT but also of other telecom players,” said Ray Espinosa, PLDT director and head of regulatory affairs and policy.
Aside from Globe, other firms and consumer groups that attended Monday’s public hearing included Sealand Telecommunications Co. Inc., Eastern Telecommunications Philippines Inc., TXTPower, and TXTMate.
Sealand asked the NTC to impose stricter regulatory provisions on PLDT and Digitel. In its comment on the acquisition by PLDT of a majority stake in Digitel, Sealand said imposing greater obligations on PLDT and Digitel, as compared to those imposed on other carriers, as a competitive policy, will help protect the industry and consumers.
“PLDT’s acquisition of Digitel will create a public telecommunications entity which, despite PLDT’s avowed intent to keep operations separate, will effectively control a commanding 70-percent share of the telecommunications market, as compared to the mere 30 percent held by its nearest, not to mention only remaining, competitor,” it said.
With its acquisition of Digitel, Sealand said PLDT effectively adds Digitel’s 42.5 megahertz (MHz) of radio frequency spectrum to the 112.5 MHz that it already holds or controls, thus giving it a total of 155 MHz, which is 84 percent of the total usable radio frequency spectrum.
Because of this, Sealand said the acquisition would create an industry with “imperfect market competition,” which could give rise to predatory pricing, low quality of calls, slow innovation of technology and inefficient delivery of products and services.
To prevent this, Sealand proposed that the NTC require PLDT-Digitel to provide detailed performance-monitoring reports to competitors and regulators regarding their networks and operational systems, negotiate with other carriers and under the supervision of the NTC institute performance standards and enforcement mechanisms covering all major aspects of operation and network performance, among other things
On the reallocation of frequencies being asked by Globe and Sealand, Espinosa said, “That is what all this noise is about. Globe’s opposition to the Digitel investment is not based on principle or out of concern for consumer interest. They want to hold hostage the Digitel deal so that they can get free radio frequencies that PLDT and Digitel are already using to serve their customers. These frequencies are being used properly and efficiently to serve millions of subscribers.”
This, he said, will also undermine the objectives of the Digitel investment, which include optimizing investments in new technologies such as LTE or fourth-generation mobile technology that will help bring broadband Internet services faster to more areas of the country.
“Through this substantial investment in Digitel and through its accelerated capex program, PLDT is committing considerable resources in order to make good its pledge to bring better services to more Filipinos,” Espinosa said. “Globe wants a freebie.”
