MANILA, Philippines - Philippine Long Distance Telephone Co. (PLDT), Globe Telecom Inc. and San Miguel Corp. (SMC) have maintained their position the recent transaction involving the purchase of the latter’s telecommunications business is deemed approved by the Philippine Competition Commission (PCC).
In separate disclosures to the Philippine Stock Exchange yesterday, all three firms said they are sticking with their stand that the joint purchase by PLDT and Globe of the entire equity interest in SMC’s Vega Telecom Inc. (VTI), New Century Telecoms Inc. and and eTelco Inc. for P70 billion are deemed approved.
However, the PCC said in a statement yesterday the telcos may have violated the Philippine Competition Act (PCA) and their initial filing to theCommission has been denied.
In the meantime, the Commission said telcos should be directed to and guided by Section 17 of the PCA which provides that “an agreement consummated in violation of this requirement to notify the Commission shall be considered void and subject the parties to an administrative fine of one percent to five percent of the value of the transaction.”
“They are also reminded that the PCA is in effect since August 2015. The law is not only about mergers and acquisitions; it also makes illegal, anti-competitive agreements and acts that can be considered abuse of dominant market position, which are separately penalized by the PCA,” it said.
All three companies said they also issued separate letters to respond to the PCC’s letter dated June 7, which stated the notices for the transaction are insufficient and cannot be claimed to be deemed approved.
With respect to the VTI transaction, PCC said the notice is deficient and defective in form and substance, and the missing key terms of the transactions are critical since the Commission considers certain agreements as prohibited or illegal.
As for the two other companies New Century Telecoms and eTelco, PCC said that while the compulsory notification under the circulars do not apply, the notices are still not enough in form and substance if the circulars were applicable.
In its response to the PCC, PLDT said the notice on the VTI transaction is adequate, complete, sufficient and compliant with the requirements under the Circulars of the PCC, and does not contain any false information.
“Therefore, the VTI transaction is deemed approved and cannot be subject to retroactive review by the Commission,” PLDT said.
PLDT said all parties have also taken steps to ensure the VTI transaction would not prevent or restrict competition by returning certain frequencies in the 700 Megahertz (MHz), 850 MHz, 2500 MHz and 3500 MHz bands to allow a third party to offer services and enter the market.
For its part, Globe said in its letter to PCC the deficiency in form and substance of the notice claimed by the PCC is not a ground to claim the transaction is invalid.
Globe also said the transaction went through thorough review by the parties and their respective advisers to ensure it is compliant with the Philippine Competition Act and it would provide benefits to the public.