In an opposition filed with the National Telecommunications Commission (NTC), ETPI urged the regulator to impose conditions to ensure the deal will not kill competition.
It also called for an audit of the telco and other governemnt infrastructure concessions controlled by PLDT's parent, Hong Kong-based First Pacific Co. Ltd., in the Philippines.
ETPI said the NTC’s Competitive Policy considers market share as the most transparent indicator of a company's dominance.
It noted that a market share of 40% gives rise to a presumption of significant market power, while a market share of less than 25% is deemed insufficient for a player to behave as if it were unaffected by market forces.
ETPI said the PLDT-Digitel transaction will result in the PLDT group having significant market power by virtue of its control over Smart Communications Inc., Smart Broadband Inc., Connectivity Unlimited Resource Enterprise Inc., Digitel and Digitel Mobile Philippines Inc.
It said that the group "will acquire a commanding 70% market share of the entire suite of telecommunications services currently being offered" in the Philippines.
These services include cellular mobile communications, local exchange carrier (LEC) services, inter-exchange carrier (IXC) services, international gateway facilities (IGF), fixed and wireless broadband services, and value-added services.
"Likewise of importance is the control of the PLDT combine, its related companies and affiliates of various other companies and facilities… and government infrastructure concessions," ETPI said.
It cited Manila Electric Co. and its subsidiary, eMeralco Ventures Inc., both of which own and lease out significant fiber optic cables and telecommunications-related assets, such as poles, in areas where Meralco operates. Also part of the First Pacific group's concessions are the Subic-Clark-Tarlac Expressway and North Luzon Expressway.
"Related companies and affiliates of the PLDT combine will therefore be in a position to restrict access by competitors of the PLDT combine to such telecommunications-related facilities."
ETPI also pointed out that the PLDT group will effectively control six out of the existing seven international cable systems that carry outbound voice and data traffic, and four out of the current five cable landing stations where such undersea cable systems terminate on Philippine land.
"As a result, the PLDT combine will be in a position to discriminatorily price the capacities of its international cable landing stations and… restrict access to the landing stations or charge discriminatory prices for such access."
It added that the PLDT group’s dominance will also extend to a commanding control of Internet Exchanges and local Internet peering which is an arrangement of traffic exchanges between ISPs.
As a result of the transaction, ETPI said the PLDT group will have the largest Internet Exchange in the country in terms of membership and, with its command of very extensive telecommunications facilities, "will be in a position to restrict access to locally hosted content by deliberately disallowing traffic from competitors to pass through its network."
