‘Options’ for easier entry of 3rd telco player being studied

The Philippine Competition Commission (PCC) wants to skirt around current rules to find a way to approve the entry of the third telco player without the burden of a comprehensive review, top officials said.

In a press briefing on Wednesday, top officials said this would happen under the scenario that a third player would be created through a joint venture (JV).

Under current rules, companies forming a joint venture have to notify PCC about the deal if it passes certain notification requirements. After which point, PCC would have to study the transaction to see if there are possible anti-competitive concerns.

For example, the JV needs to be notified if the acquiring company costs at least P5 billion, among other requirements. In the case of a JV, the contributing entities would be considered acquiring entities and the JV would be considered the acquired entity.

“What we’re studying really is what are the possible substitutions for compulsory notification because in case this third player would come together by JV or by some form of merger, that would require notification,” said Commissioner Stella Alabastro Quimbo.

“In the interest of helping the government speed up the selection process, what we want to do is to participate early on in the [policy-making] process rather than do an approval after it had been submitted. This is really to help reduce the cost of doing business,” she added.

The Department of Information and Communications Technology (DICT) is preparing the rules in selecting a much needed third player in the telecommunication industry.

PCC, which is on a legal row with telco duopoly PLDT and Globe, is sharing its inputs on the matter.

Commissioner Johannes Bernabe said there are a number of issues that need to be addressed to ensure that the player would be able to expand its operations “in the long term.”

“The important [aspects] there are frequency allotment, [low-cost and indiscriminate] interconnection [rates], and if there is space for further telco players, how do we ensure that such further players would not be foreclosed from entering the market?” he said.

A long awaited entry, the name of the third player is expected sometime this May. The Department has set the bidding deadline on May 18.

So far, local and foreign players have expressed interest to bid for the slot. Foreign companies, however, would have to partner with local companies to comply with the foreign ownership limit under the 1987 constitution. /lb