NTC to ask PLDT to make Sun 'unli' promo permanent

The National Telecommunications Commission (NTC) may require telecommunications leader Philippine Long Distance Telephone Co. (PLDT) to make Sun Cellular’s unlimited text and call promos a permanent offering as a condition for the NTC’s approval of PLDT’s acquisition of a 51.55% stake in Digital Telecommunications Phils. Inc. (Digitel). Highly placed sources told The STAR that under the Public Services Act, any sale or transfer of shares of stocks by a public utility that will result in the transferee owning more than 40 percent must not prejudice public interest. “To make sure that Digitel’s sale to PLDT will not prejudice public interest, and despite the fact that PLDT has already said that Sun Cellular’s unli text and call promos will remain, the NTC will ask PLDT to make these promos, which currently are available for a limited period, permanent,” the source said. Digitel is the 100% owner of Digitel Mobile Philippines, Inc., which owns the brand Sun Cellular. It also has a substantial fixed line and broadband business. In addition, PLDT and NTC are in discussions over a possible divestment by PLDT of the 3G frequencies held by its subsidiary Connectivity Unlimited Resourced Enterprise (CURE). The NTC is expected to finally decide by next week on a joint PLDT-Digitel application seeking approval of the sale. The commission has 90 days or until October 26, 2011 or from the time the last pleading was filed to come up with a decision, although NTC said that the period is not mandatory. NTC Commissioner Gamaliel Cordoba told reporters late last week that all the inputs needed in deciding on the controversial deal are already with the government, thus, giving it sufficient footing on the issue. “All inputs that we need are already in. So, we already can [decide],” he said, but added that there is still no schedule on when an approval or denial will be issued on the PLDT-Digitel deal. Cordoba said the 90-day period is just a “reasonable length of time” that will “guide” the regulators to evaluate the transaction and its effect on the telecommunications industry. Thus, he said the regulator cannot be forced to either deny or approve the P69-billion deal at the end of the 90-day period. According to Cordoba, an ideal telecom industry should have several players in order to protect the welfare of consumers. “The more providers to choose from, the better for the public. If there are several players in the market, prices will go down and services will further improve because of competition,” he said. Currently, there are only three cellular providers in the local telecoms industry that include PLDT’s wireless arm Smart Communications, Digitel’s Sun Cellular and Globe Telecom. The acquisition of Digitel by PLDT in the latter cornering over 70 percent of cellular subscribers. PLDT, however, said Digitel will be managed separately from PLDT and will retain its branding even after the acquisition. PLDT said it is cognizant though of the concerns raised by government and certain oppositors regarding the group’s ownership of 3G frequency. “We would like to assure all the parties that it is not PLDT’s intention to accummulate the said frequency. Thus, in order to pave the way for the issuance of the NTC approval and completion of the acquisition transaction given the substantial public benefit it will create, PLDT is in discussions with NTC regarding the possibility of divesting frequency held by CURE,” it revealed. Even with this, PLDT maintained that there is no legal basis for government to recall any radio frequency held by the group. “All radio frequencies held by the PLDT group are being properly, effectively, and efficiently used by the groyp to meet the demands of public service and all fees due on the assignment and use of such frequencies have been properly paid in a timely manner,” company officials said. PLDT said it firmly believes that the acquisition transaction will be beneficial to the public good and public service and that issue raised by government, the NTC, and certain oppositors regarding radio frequency should not be an obstacle to the NTC’s approval thereof. The PLDT group has 25 mhz of 3G frequencies, 15 mhz of which is held by Smart and 10 mhz by CURE. The original closing date of the acquisition deal, originally targeted for June 30 was twice extended - to July 30 and then to August 26 due to prolonged disposition of the application for approval by the NTC. PLDT and Digitel filed their joint application for the approval of the sale to the former of an initial 51.55 percent of the outstanding shares of Digitel from the Gokongwei group last April 27. “What should have been a straightforward summary proceeding turned into a protracted proceeding as Globe and other oppositors raised extraneous matters, including a grant of additional frequency assignments to Globe as well as IP peering, and even sought for the suspension of the proceeding and disapproval of the transaction, arguing that PLDT’s foreign ownership exceeds the constitutional limit on the basis of the Supreme Court’s decision in the Gamboa casem which has not even attained finality,” PLDT pointed out. PLDT has already obtained the Security and Exchange Commission’s (SEC) confirmation of the valuation of the said Digitel shares, and convertible bonds and advances which PLDT will acquire in consideration of new shares of common stock to be issued by PLDT.