PLDT-Digitel union in peril

DOMINANT carrier Philippine Long Distance Telephone Co. (PLDT) will not extend the closing date of its P74.1-billion acquisition of Sun Cellular from the Gokongwei family’s JG Summit Holdings if the transaction is not approved by the end of this month.

“That is the view of senior management,” PLDT regulatory affairs head Ray C. Espinosa said in a text message.

He was reacting to statements made by PLDT chair Manuel V. Pangilinan on the company’s plan to buy a majority stake in Digitel Telecommunications Philippines Inc., operator of the Sun brand.

PLDT’s planned acquisition of Digitel was announced earlier this year, but the National Telecommunications Commission (NTC) needs to give its green light before the deal is completed.

Pangilinan said the company would drop its bid to acquire Digitel if the required approvals are not issued within the month. “We fully agree and support (Pangilinan’s) statements,” Espinosa said.

PLDT and JG Summit originally agreed on a June 30 deadline to complete the transaction.

But both parties were forced to move the deadline to August 26, the last working day of the month, due to legal questions.

The NTC held several hearings from June to July to hear issues about the deal.

Several parties, led by Globe, opposed the PLDT-Digitel deal, saying the merged entities would end up monopolizing the local telecom market.

Globe asked the NTC to strip PLDT of its frequency assignments and in turn hand these over to Globe to “level the playing field.”

“That condition would not have any legal basis,” Espinosa said.

He said under the law, radio frequencies, which are used to deliver mobile phone services such as voice calls, text messaging and broadband Internet, may only be recalled if these are not being used efficiently or if a company fails to pay the required government fees.

“All of PLDT’s frequencies are being used effectively and efficiently and all fees due on these have been paid,” Espinosa said.

PLDT has argued that the Digitel acquisition would result in better services and cost savings that can be passed on to consumers.

“What should have been a straightforward summary proceeding turned into a protracted proceeding as (Ayala-led) Globe Telecom and other oppositors raised extraneous matters,” PLDT said in a disclosure.

These include a grant of additional frequency assignments to Globe, to be taken from PLDT’s own frequencies, as well as the Interconnection of local broadband networks, which PLDT has opposed.

PLDT said Globe likewise sought the suspension of proceedings, “arguing that PLDT’s foreign ownership exceeds the constitutional limit on the basis of the Supreme Court’s decision in the Gamboa case, which has not even attained finality.”