PLDT in talks with NTC on divestment of radio frequencies

MANILA, Philippines - The Philippine Long Distance Telephone Co. (PLDT) Group said yesterday it is in talks with the National Telecommunications Commission (NTC) regarding the possibility of divesting certain radio frequencies to pave the way for NTC’s approval of the proposed acquisition by PLDT of an initial 51.5 percent stake in Digital Telecommunications Phils Inc. (Digitel) from the JG Summit Group.

As part of a divestment plan being worked out between the PLDT Group and NTC, PLDT said it may surrender 10 megahertz of 3G (third generation of mobile communications technology) frequencies held by Connectivity Unlimited Resources Enterprise (CURE), a subsidiary of Smart Communications.

PLDT said it is aware of the concerns raised by government and certain oppositors regarding the group’s ownership of 3G frequency. “We would like to assure all the parties that it is not PLDT’s intention to accummulate the said frequency. Thus, in order to pave the way for the issuance of the NTC approval and completion of the acquisition transaction given the substantial public benefit it will create, PLDT is in discussions with NTC regarding the possibility of divesting frequency held by CURE,” it said

Even with this, PLDT maintained that there is no legal basis for government to recall any radio frequency held by the group.

“All radio frequencies held by the PLDT Group are being properly, effectively, and efficiently used to meet the demands of public service and all fees due on the assignment and use of such frequencies have been properly paid in a timely manner,” company officials said.

The NTC has 90 days under the Public Service Act from the time the last pleading was filed on July 27, 2011 to decide on the application, but sources noted that the decision is actually up to Malacañang.

An NTC official told The STAR that the 90-day period is not mandatory so that the commission can still decide before or even after Oct. 26, 2011.

PLDT said yesterday it firmly believes that the acquisition transaction will be beneficial to the public good and public service and that issue raised by government, the NTC and certain oppositors regarding radio frequency should not be an obstacle to the NTC’s approval thereof.

The PLDT Group has 25 mhz of 3G frequencies, 15 mhz of which is held by Smart and 10 mhz by CURE.

After the NTC failed to decide on the deal last Aug. 26, PLDT and JG Summit announced that they are in joint consultation as to whether the date for the finalization of the transaction shall be extended further.

“The two parties shall consult their respective boards of directors and make a formal announcement as soon as practicable,” PLDT said.

The original closing date of the acquisition deal, originally targeted for June 30 was twice extended – to July 30 and then to Aug. 26 due to prolonged disposition of the application for approval by the NTC.

Palace spokesperson Edwin Lacierda has said that Malacañang is still studying the deal.

For his part, NTC commissioner Gamaliel Cordoba said that they are still working on a comprehensive review of the transaction “as we want to ensure that our eventual decision is in conformity with existing laws and would promote the national interest.”

PLDT and Digitel filed their joint application for the approval of the sale to the former of an initial 51.55 percent of the outstanding shares of Digitel from the Gokongwei Group last April 27.

PLDT has already obtained the Securities and Exchange Commission’s confirmation of the valuation of the said Digitel shares, and convertible bonds and advances which PLDT will acquire in consideration of new shares of common stock to be issued by PLDT.

The company also stressed that the transaction would benefit the consuming public and support the “broadbanding the nation” initiative of the government. “We remain hopeful that the NTC approval is forthcoming,” it said.

Digitel is the 100 percent owner of Digitel Mobile Philippines Inc., which owns the brand Sun Cellular. It also has a substantial fixed line and broadband business.