P70-B telco asset sale not yet a done deal

The country’s competition watchdog is seeking public comments on the P70-billion joint acquisition of San Miguel Corp.’s telecommunication assets by incumbent players PLDT and Globe Telecom as it starts a review of the closely watched deal.

The Philippine Competition Commission (PCC) said comments should be submitted to its office, or by email, on or before Aug 6 this year.

The announcement comes after the antitrust body separately met with representatives of PLDT, Globe and SMC to seek their “cooperation” in line with its review.

Stakeholders were invited to comment mainly on PLDT and Globe’s acquisition of SMC’s Vega Telecom, the holding company of the conglomerate’s valuable radio frequency assets, including those in the coveted 700 megahertz band.

The PCC wanted to know whether the deal would “substantially prevent, restrict or lessen competition in the relevant market or adversely impact consumer welfare.”

The telco duopoly was criticized for launching the massive transaction to end SMC’s bid to become a third challenger in the telco industry. Talks between the three groups started soon after SMC’s own negotiations with potential partner Telstra Corp. Ltd. of Australia failed last March.

PLDT and Globe argued that they needed SMC’s unused frequencies to improve internet services amid stifling local government permitting rules hindering the expansion of physical infrastructure like cell sites.

The 700 MHz, in particular, is a low-band frequency prized for its ability to efficiently cover wide distances and penetrate buildings.

Vega also held other radio frequency assets in higher bands, which are good for capacity. As part of the deal, PLDT and Globe also returned a slice of the acquired 700 MHz, 850MHz, 2500 MHz and 3500MHz frequencies to the government. They claimed this was enough to facilitate the entry of a third player, should the government choose to auction these off.

In ordering the review, the PCC asserted its position that the deal still required government approval.