Globe says no need to auction Bayantel frequencies

MANILA, Philippines - Ayala-led Globe Telecom Inc. is strongly opposing the proposal of rival Philippine Long Distance Telephone Co. (PLDT) that the National Telecommunications Commission (NTC) auction off the radio frequency of cash-strapped Bayan Telecommunications Holdings Inc. (Bayantel).

Globe general legal counsel Froilan Castelo said in a statement that the radio frequencies being disputed by PLDT are vital in the rehabilitation of Bayantel that has been approved by a lower court in Pasig City in August last year.

“The radio frequencies were already assigned to Bayan. These frequencies are essential part for the success of Bayan’s rehabilitation as approved by the Pasig Regional Trial Court,” Castelo said.

PLDT earlier warned that Globe stands to acquire a grossly disproportionate amount of frequencies in relation to subscribers as it currently accounts for 32 percent of the cellular market as against PLDT’s 68 percent.

Globe already has control over 22.5 megahertz (MHz) of the 1800 MHz 2G bandwidth as opposed to PLDT’s 37.5 MHz, 50 MHz, and 2500MHz 4G bandwidth and 35MHz.

With the planned acquisition, Globe would have access to Bayantel’s 50MHz for 4G frequencies on top of its existing 45MHz while PLDT through Smart and Digitel only has access to 35Mhz of frequencies in 4G bandwidth.

The dominant carrier argued that Globe does not need the frequency spectrum assigned to Bayantel as its subscriber to frequency ratio is significantly lower than that of PLDT.

Furthermore, Castelo argued that the proposed takeover of Bayantel by Globe does not need Congressional approval as the transaction only involves the transfer of shares of stocks.

He pointed out that the transaction is similar to the acquisition of Digital Telecommunications Philippines Inc. (Sun Cellular) of taipan John Gokongwei by PLDT in 2011.

PLDT spent close to P70 billion to buy out Gokongwei’s stake in Digitel. Globe opposed the planned merger between PLDT and Digitel.

“Let us reiterate that Bayan and Globe have a responsibility to serve the expanding needs of Filipino consumers through improved products and services. The success of Bayan’s rehabilitation will give the Filipinos a better alternative service provider,” Castelo added.

Last Oct. 9, the 17th Division of the Court of Appeals issued a temporary restraining order (TRO) enjoining the implementation of the orders issued by the NTC allowing the continuation of the proceedings in connection with Globe and Bayantel’s joint application for regulatory approval.

Globe is acquiring a 56.6 percent stake in Bayantel through the conversion of 69 percent of Bayantel’s total debt. In return, the outstanding principal debt of Bayantel would be reduced by 69 percent to $131.3 million from $423.3 million.

It also intends to acquire the remaining interest of the Lopez family in Bayantel.

Last May 30, Globe and the Lopez Group asked the rehabilitation court to restructure Bayantel’s $423.3 million debt to prevent default.

Bayantel’s outstanding debt stood at $497 million when it was placed under corporate rehabilitation in 2004. It intends to pay its $325 million outstanding debt within 2023.