Ayala-owned Globe Telecom, as well as consumer groups and third-party players have earlier manifested their opposition to the blockbuster agreement.
Eastern, through its legal counsel, said it is opposing the transaction since this would result in PLDT’s overwhelming dominance and significant market power which it may use “to commit acts that are detrimental to free competition and public interest”.
With the merger, Eastern said PLDT will control 70 percent of the entire telecom market, including mobile, landline, inter-carrier services, international gateway facilities, broadband, and value-added services.
“With such dominance, PLDT will be able to discriminatorily price its services, subsidize underperforming units with income of dominant brands, and leverage its assets and command of the market in interconnection disputes so as to delay or hinder interconnection,” the Makati-based firm said.
Eastern also pointed out that PLDT will also control six out seven international cable systems that carry outbound voice and data traffic, and four out of five cable landing stations.
“The dominance will extend to a commanding control of Internet Exchanges and local Internet peering. PLDT will be in a position to restrict access to locally hosted content by disallowing traffic from competitors to pass through its network,” the company added.
As for Casino, the lawmaker said PLDT’s buy-out of Digitel violates the anti-trust provisions of the Constitution.
Casino
“Obviously, a 70 percent market share results in tremendous market power for PLDT-Digitel, giving rise to a situation where they can dominate the market, dictate prices and influence the entire industry in their favor. This is precisely what happened in the past, when PLDT monopolized the telecommunications industry,” Casino said.
The party-list solon also said the deal is in direct violation of the congressional franchise granted to Digitel.
In section 16 of RA 9180, it is provided that Digitel “shall not lease, transfer, grant the usufruct of, sell nor assign this franchise, or the rights and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity, nor merge with any other corporation or entity nor shall the controlling interest of the grantee be transferred, whether as a whole or in parts and whether simultaneously or contemporaneously, to any such person, firm, company, corporation or entity without prior approval of Congress.”
“Thus, the planned Digitel by PLDT — without prior approval of Congress — is not only a clear violation of the franchise given by the State to these entities but also a flagrant act to control the telecommunications market, virtually leaving the entire nation at the mercy of two telecommunications giants, PLDT and Globe Telecom,” Casino said.
He said the entry of Digitel, through Sun Cellurar, in 2002 proved that telecommunications service prices could still be lowered.
“In fact, Sun Cellular has been repeatedly blamed by Smart communications and Globe Telecom for unfairly running down the prices of’ ICT services. Gobbling up Digitel through this buy-out allows the remaining players to do away with the competition, giving them much more leeway in raising prices,” Casino said.
