Anti-trust body faces tough test in telco deal

MANILA, Philippines – A tough initial test lies ahead for the country’s newly-formed anti-trust commission as it is expected to collide with three of the Philippines’ largest conglomerates to probe a multi-billion-peso telecommunications deal.

“It’s a good baptism of fire for them. It’s something that they have to look into. Now that you have a major deal going, it’s a serious game. But I have all the confidence in Arsenio Balisacan and the members of his commission. If there’s probably one that will be a good chairman, it’s him,” Management Association of the Philippines president Perry Pe told The STAR.

Balisacan, a former Socioeconomic Planning Secretary, heads the Philippine Competition Commission (PCC) which plans to look into the joint acquisition of Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom of San Miguel Corp.’s telecommunications assets.

The deal, signed Monday, is believed to further strengthen PLDT and Globe’s duopolistic hold on the local telecommunications market.

Both companies, however, claimed the P70-billion transaction is expected to provide customers with better internet services within three months at the earliest.

“It took everybody by surprise. But let’s give it a chance and see what’s there. We don’t know anything about the deal yet but if it turns out that there are some anomalies there, I think this will be a great thing for the PCC to catch its teeth on. If it helps speed up broadband, the better. If not, then it will be an ideal first case for this commission,” American Chamber of Commerce of the Philippines executive director Ebb Hinchcliffe told The STAR.

“Indeed it is a major case for the new commission to be cutting its teeth on. It’s very important from outside observers to see how this case is handled. But whether there is collusion or violation in competition laws, we don’t know that yet. That’s up to the PCC to determine. It’s very important for PCC to operate and take on challenging cases like this one appears to be,” AmCham Philippines senior advisor John Forbes added.

In an interview yesterday, PCC chair Balisacan declined to further comment on the deal saying the commission has yet to see details of the transaction.

“The Philippine Competition Act prohibits anti-competitive agreements such as abuse of dominant position. The commission has the power to examine transactions, especially those that have impact on public interest. But we haven’t seen the tales of the transaction so it’s very difficult to say anything specific. We cannot say if it is deemed approved and we also cannot say it’s not because we still have to see their submission,” Balisacan said.

The PCC in a statement issued Monday said the provisions of the Philippine Competition Act are fully in effect and would not require the final issuance of implementing rules and regulations to trigger effectivity.

“In view of the importance of this transaction to the public interest, the PCC will assert all of its powers as provided for in the law. We assure the public and the parties that the commission recognizes the urgency of the matter and will move quickly to reach a fair assessment. Because of the strong public clamor for faster, cheaper, and better quality internet and mobile services, and that these could be stymied by a lack of competition in the sector, the commission has a keen interest in this proposed transaction. The commission shall assess and take action as appropriate,” the PCC said.