“There is no need for approval of Congress on the merger of Digitel and PLDT because Congress, which gives licenses to telecoms franchises, allowed Digitel to sell the controlling interests of the succeeding company, like the PLDTSmart,” Enrile said.
PLDT bought the controlling interests of Digitel for P79 billion, but the deal is pending approval of the National Telecommunications Commission (NTC).
To ventilate consumers’ views, the Senate Committee on Public Services chaired by Sen. Ramon “Bong” Revilla Jr. held an inquiry Tuesday to determine the impact of the deal, particularly the issue of telecom promos like unlimited texting.
The inquiry was called also based on the resolution of Senator Joker Arroyo calling the committee to conduct a review, in the exercise of its legislation, of the reported share-swap deal and related transactions of the PLDT and Digitel.
During the hearing, Sen. Arroyo said the inquiry was not to investigate the deal but to determine whether the transaction is consistent with or are not in violation of certain provisions of their respective legislative franchises and that the arrangement would be to the public interest.
Enrile said there was no basis of Globe Telecom’s concern over the serious adverse effects of the PLDT-Digitel deal on free competition and pro-consumerism.
With this, he said, the government cannot revoke the deal.
Enrile even chided Globe officials, saying they are using the Senate to favor their complaint about the acquisition of Digitel by the PLDT. “There’s no way they can use the Congress to favor them,” said Enrile.
“Mababa ang presyo ng Globe, gusto nila eh mababa, kaso eh dinoble ng Smart ang presyo kaya sila ang nakabili ng Digitel. Smart is really smart, and business is just like gambling, kung talagang di ka desidido sumugal, eh matatalo ka,” said Enrile. (“Globe’s bid price is very low, but Smart doubled the price and so they succeeded in acquiring Digitel. Smart is really smart and business is like gambling, if you are not determined you’ll surely lose.”)
But Enrile urged the NTC that the frequency of both should not be given for free as has been the practice for quite so long. “They must sell it. It’s a natural resource and valuable asset. In other countries they bid it out, Enrile told reporters.
On the issue of monopoly, Enrile said monopoly alone does not mean that it is bad, because there are natural monopolies that give you the franchise to operate a public utility in a given area, that’s a monopoly but the price is regulated.
He said in this case of PLDT-Digitel deal, there is no showing that the acquisition is to restrain competition.
On the other hand, the PLDT officials who attended the inquiry assured the public that their services will be further improved with the acquisition of the Digitel.
Atty. Ray Espinosa, director and head of the Regulatory Franchising of PLDT, assured the public that it will not remove the unlimited call and text service of Sun Cellular following its acquisition of the controlling share of Digitel Telecommunications. Mas marami na makikinabang sa Sun unli,” he said.
Espinosa pointed out that the deal will not only retain the “unli” services of Sun Cellular but it will make it stronger with wider and better coverage because Sun will utilize the advanced and extensive infrastructure of PLDT.
He also stated that the deal does not violate the provisions of the two firms’ legislative franchises because it aims to enhance public service.
“The transaction will also accelerate the pace of mobile broadband rollout and lead to the early creation of a robust nationwide mobile broadband backbone. With combined and optimized networks, it is expected that mobile broadband services will cover 95% of the country’s geographic areas in three years. This is consistent with the PLDT group’s Internet for all advocacy and will make mobile broadband widely available and more affordable to all Filipinos nationwide,” he said.
He further stated that “Digitel’s fixed line subscribers will benefit from PLDT’s extensive and enhanced nationwide digital fiber optic network and thus enjoy, among others, faster rollout of enhanced wired broadband services.”
He added that a similar deal was forged between Globe Telecoms and Islacom in the past which was approved by the Securities and Exchange Commission and the NTC in 2001.
“The transaction is in the public interest. It promotes the public interest. The transaction is pro-consumer, pro-masa,” Espinosa said.
Revilla said the NTC should immediately resolve the issue of interconnection of the telecom firms.
NTC Commissioner Gamaliel Cordova assured Revilla and other senators present in the hearing that the NTC is still on the stage of resolving the issue of interconnection and vowed to address the problem as early as possible.
Meanwhile, Malacañang said the letter of th the Ayala conglomerate to President Benigno S. Aquino III is not influence-peddling, saying anyone can air his views to the President if it is based on national interest.
Globe Telecoms sent a letter to President Aquino seeking additional Third Generation (3G)/Universal Mobil Telecom System (UMTS) frequencies, saying the merger of PLDT and Digitel results in an imbalance in 3G assignments.
The letter was signed by Globe Telecom Chief Executive Officer Jaime Augusto Zobel de Ayala, a staunch supporter of the President during the May 10, 2010 election.
Presidential Communications Development and Strategic Planning (PCDSP) Secretary Ricky Carandang said the letter cannot be considered as “influence-peddling.”
“I think any government is obligated to take into account the views, the legitimate views, of any stakeholder. There’s no question that Globe is a stakeholder, that they have certain views here,” he said.
Carandang said the President is aware of the issue and it is being studied by the economic team.
“The concerns of the President would be: number one, are we creating a situation where… that hampers fair competition in the industry. Number two, what impact will this have on the consumers. Those are the criteria that we’re using to evaluate,” Carandang said.
“What the President is aware of are the concerns that have been raised by Globe and other stakeholders. Even consumers are asking us: Is this going to lead to an end to the benefits that they have – the unlimited texts, the low cost of cellphone calls? Everybody who has a stake in the outcome of this merger has made their views known and I think it’s part of the democratic process and we’re evaluating it based on the merits,” he said.
