What is Balisacan up to?

This move by Philippine Competition Commission (PCC) head Arsenio Balisacan attempting to undo the P70 billion buyout of San Miguel Corporation’s Vega Telecom by PLDT and Globe is just one more demonstration of the kind of flip-flopping and wishy-washiness that has become associated with the outgoing Aquino administration. While saying that the PCC has yet to see the details of the mega-transaction, Balisacan claims that the initial filing made by the two companies has been deemed “deficient and defective in form and substance,” and yet refuses to elaborate on this statement, leaving the telcos guessing how the commission came out with that kind of conclusion.

The PCC is a recently formed anti-trust watchdog with the appointment of Balisacan (who has a seven-year term under the Philippine Competition Act  or PCA that created the commission) said to be a “reward” from the Aquino administration, with the body’s main function being to prevent unfair business practices that would be onerous to consumers. A statement released by the PCC said PLDT and Globe may have failed to comply with the guidelines of the PCA that says an “agreement consummated in violation of the requirement to notify the commission shall be considered void…” – which both companies have strongly refuted because they filed corresponding notices of purchase which is in keeping with the said guidelines.

According to both companies, PCC Memorandum 16-002 only requires a notice of transaction for deals above one billion to be “deemed approved” and which may no longer be challenged under Section 23. Just what kind of “deficiency” the notices filed by the telcos had was not also explained – leaving everyone guessing and confused. Both PLDT and Globe have stood firm, saying the notice sent to the PCC regarding the buyout did not contain any false information – which is the only way that the deal could be disapproved, said sources privy to the transaction.

What is also worth noting is that prior to the completion of the PLDT-Globe buyout of the SMC telco, the PCC has not released the implementing rules and regulations (IRR) for the Philippine Competition Act – an after-the-fact situation once again according to industry observers. While concerns were aired regarding the acquisition, several industry leaders such as Perry Pe of the Management Association of the Philippines (MAP) have lauded the deal, saying it is “good for the country” as it will enable consumers to have access to high-speed mobile Internet soon since included in the deal is the 700 MHz spectrum band that is more cost efficient, has wider coverage and better indoor penetration which means better signal inside buildings.

We don’t know what the fuss is with Balisacan since all parties concerned agree that it was the best move so far – win-win not only for the two telcos and San Miguel but the public whose interest will be better served as the availability of the 700 MHz – which has remained idle under SMC’s Vega Telecom – will enable the two telcos to increase their subscriber base, and make internet services faster, more reliable and more affordable. What is not also being highlighted is the fact that the transaction also returned several frequencies to the government, which means that the door for a third telco player remains open contrary to claims that the buyout virtually cements a duopoly by PLDT and Globe.

Being a savvy businessman himself, SMC president Ramon Ang was just being practical when he decided to sell the telecoms asset because the P70 billion will give him more funds to expand investments in businesses other than telecoms which would have required massive requirements for infrastructure (cell sites/towers for instance).

Many in fact describe the buyout as a “master stroke” on the part of Ramon Ang because SMC got a good deal. Besides, the initial talks with Telstra were not really getting anywhere, observers noted, adding that the competition is getting more tough in the telecoms industry, with providers offering all kinds of bucket deals that have also resulted in the significant lowering of costs over the years.  You also have to hand it to Ramon Ang who had the public interest at heart, realizing that the acquisition of several frequencies – especially the 700 MHz – will result in faster and more affordable Internet access sooner than later. 

No less than president-elect Rodrigo Duterte has also recognized the importance of faster Internet access in accelerating progress in many parts of the country especially the hard-to-reach areas.  My good friend, incoming DOTC Secretary Art Tugade is also in agreement that the country needs to catch up with the rest of the world as far as information technology is concerned. In fact, during his short stint with the Clark Development Corp. (where he did very well), Art encouraged the construction of the P1.3 billion data center in the Clark Ecozone  to make it more attractive to investors. Clark partnered with PLDT for the VITRO Data Center which would cater to the needs of the business communities in the area and give them an opportunity to compete in the global market. 

Spy tidbit: JOYA Gallery to hold third exhibit

Young gallerist Julian Ongpin is opening a new exhibit called “Chrysalis” which will run from June 28 to August 15 at the Julian Ongpin Young Artists (JOYA) Gallery at the second floor of The Shops at Alphaland Makati Place. The exhibit – the third since the gallery opened in October last year – features the works of Canada-raised artists Casper Kang and Jay Yao Campos who both emigrated back to Southeast Asia to further pursue their artistic careers in their respective homelands. Both artists have backgrounds and experiences outside of fine art. Yao, a graduate of the Parsons Design College, currently runs a design and branding firm, while Kang has completed notable design briefs for blue-chip companies such as Adidas, Absolut Vodka and Korean company Binggrae.

* * *

Email: [email protected]