CAGAYAN DE ORO CITY (MindaNews/30 May) – A House leader is pushing for the passage of an anti-trust law with the proposed merger of two major players in the telecommunications industry that would give them control of about 70 percent of the country’s airwaves.
House Deputy Speaker Lorenzo Tanada III said the proposed merger of Phil. Long Distance Telephone Co. (PLDT), operator of Smart Communications and Digital Communications Philippines (Digitel), operator of Sun Cellular could kill competition in the industry.
Tanada has filed House Bill 3534, “an Act prescribing an anti-trust law to strengthen the prohibition against monopolies, cartels, combination in restraint of trade and other anti-competitive practices and conduct, and for other purposes”.
If the law is passed, corporate mergers have to be approved by government and a new agency will be created to implement it, said Tanada in a meeting with the Oro Chamber of Commerce and Industries over the weekend.
The only law that protects businesses from unfair competition is the provision in the Revised Penal Code that criminalizes such practice, he said.
“The RPC provides for remedy against unfair competition. Anti Trust law will prevent unfair competition,” the lawmaker from Quezon province explained.
In his first State of the Nation Address, in July last year, President Aquino cited as one of the priorities the passage of an anti-trust law.
Meanwhile, Bayan Muna party-list Rep. Teddy Casino urged the National Telecommunication (NTC) and the Securities and Exchange Commission (SEC) not to aid the “sweetheart deal” between PLDT and Digitel.
“Digitel is not an ordinary business that can be sold to any Tom, Dick or Harry. It is always subject to the limitations of its congressional franchise and the national interest,” Casino said.
He said that if the NTC allows PLDT to acquire Digitel, “that would give them 70 percent of the cellular mobile market, leaving Globe Telecom with a mere 30 percent.”
“This is clearly a monopoly and this is not allowed under the 1987 Constitution as this will negatively impact on the public interest with regard to prices of cellular phone services. Government cannot allow any monopoly by any telecommunications company if it wants real competition to happen,” Casiño said.
The progressive lawmaker also said that the merger would violate the terms of the franchise given by Congress to Digitel if it pushes through without congressional approval.
Section 16 of RA 9189 states that Digitel “shall not lease, transfer, grant the usufruct of, sell nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity, nor merge with any other corporation or entity nor shall the controlling interest of the grantee be transferred, whether as a whole or in parts and whether simultaneously or contemporaneously, to any such person, firm, company, corporation or entity without prior approval of Congress.”
An official of Globe meanwhile said that as much as they wanted to operate business as usual amidst the merger of Smart and Sun Cellular, they cannot remain silent as “it is always a core value of Globe not to condone unethical business practices.”
Yoly Crisanto, head of corporate communications of Globe said that they are ready to compete, despite obvious difficulties because of the emerging monopoly.
She added that they are urging the NTC to be “impartial in their role as government regulator of the airwaves or radio frequency which is a national resource.”
She admitted that the merger would definitely affect their capability to compete because “there is no longer economics of scale and healthy competition is killed.”
“But probably we are doing something good in the business as we have a one percent increase in net income in the first quarter of 2011 compared to the same period in 2010,” Crisanto told MindaNews.
She said Globe now has a 27.4-million subscriber base and is expanding to 4G and increasing the network’s capacity with a U$500-million capital expenditure slated for 2011.
The PLDT meanwhile denies any irregularity in the merger.
“We are submitting the Sales and Purchase Agreement (SPA) to the NTC voluntarily to dispel malicious statements made by some parties that PLDT and Digitel have something to hide,” said Ray C. Espinosa, PLDT director and head of regulatory and policy affairs in a statement.
According SEC records, PLDT acquired 51.55 percent of Digitel shares. (BenCyrus G. Ellorin/MindaNews)