PCC review of P69.1-B telco buyout backed

The Joint Foreign Chambers in the Philippines warned Thursday that barring the Philippine Competition Commission (PCC) from reviewing a massive buyout deal might eliminate competition in the telecommunications industry and leave consumers with no alternative service providers despite complaints of high costs and poor service.

The group made the statement as it expressed concern over the preliminary injunction issued by the Court of Appeals stopping the PCC from looking into the P69.1-billion acquisition of the telco assets of conglomerate San Miguel Corp. by industry duopoly PLDT Inc. and Globe Telecom.

Since the announcement was made, JFC has already flagged down the buyout deal as possibly anti-competitive as this was deemed to cement PLDT and Globe’s “duopolistic hold on the local market amid the growing clamor for better internet services.”

As such, the telco transaction would serve as a test case, not just for the PCC but for the Philippine business community at large as well on their “willingness to abide by the precepts of fair competition.”

“We are asking for the PCC to be allowed to exercise its legal mandate and ensure that this business deal does not foreclose competition. If the review ultimately results in a finding that it is not anti-competitive, then all concerned should be satisfied that the review process was completed. On the other hand, if it is anti-competitive, then PCC should be allowed to identify remedies to foster fair competition and protect consumer welfare,” the group stressed.

The JFC cited the initial findings of the PCC, which earlier published a Preliminary Statement of Concerns on the Joint Acquisition by PLDT and Globe Telecom of Vega Telecom Inc., Bow Arken Holding Co. Inc. and Brightshare Holdings Corp.

According to the JFC, the PCC found several horizontal and vertical overlaps in the markets of PLDT, Globe and the SMC telco assets and identified multiple theories of harm.

“The preliminary findings show that, indeed, the deal potentially forecloses the entry of a new player and eliminates competition in the industry,” the foreign chambers stressed.

“The prospect of a third player last year gave consumers hope of better and more cost-friendly services either by the new player itself or as a result of the potential competition by additional players to the two telecommunications companies. With the injunction stopping the PCC from conducting further review of the transaction and allowing the deal to proceed, the hope for any new players has been frustrated, if not completely shattered,” the JFC further said.