WATCH | Court of Appeals upholds P69.1-B acquisition by Globe, PLDT of SMC telco assets

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MANILA – The Court of Appeals has upheld the P69.1-billion acquisition of San Miguel’s telco business by Globe Telecommunications and PLDT, and ordered the Philippine Competition Commission to stop probing the acquisition and recognize it as already approved by law.

The PCC, however, said in a statement it will pursue its review as part of its mandate. The CA had acknowledged the PCC’s power to conduct a post-acquisition review in order to safeguard the rights of the public.

In a 54-page decision, the CA’s 12th Division upheld the legality of the landmark deal, which the two telcos had described as vital to efforts to improve telco services in the country, especially speeding internet speeds.

The CA also had choice words for the PCC, saying the anti-trust body acted “in an arbitrary and whimsical manner by reason of passion or prejudice.” The court said that PCC’s refusal to approve the deal, sealed over a year ago, despite compliance with transitory rules also violated the telcos’ constitutional right to equal protection.

PCC, according to the CA, also violated the constitutional rights of the companies by insisting the application of the implementing rules and regulations at a time when rules and were not yet effective.

The CA also sided with the telcos in saying that the key terms of the transactions were contained in the submitted documents.

Nonetheless, the CA noted note there is no stopping the PCC from conducting what it calls a “post-acquisition review” to ensure that parties do not misuse the acquired assets to engage in anti-competitive behavior.

The PCC declined to specify what their next step would be as they have yet to receive a copy of the decision, but made it clear they will pursue all available remedies.

PCC chair Arsenio Balisacan said,”we will explore and pursue what is allowed by law for us, take the legal options to the limit.”

PLDT welcomed the decision, noting that the acquisition has allowed them to improve their services, and the ruling will pave the way for proceeding to the setting up of infrastructure.

PLDT chair and CEO Manuel V. Pangilinan
said, “actually, both Globe and ourselves are probably implementing the agreement with San Miguel on the use of the frequency, so we will proceed with the work of building the relevant infrastructure.”

At least, added Pangilinan, “we could say that broadband speed has increased based on our part and in terms of coverage as well. We are pushing the buildout of 3G — 3G we are probably substantially okay; 4G is where we need a bit of more work for the balance of the year and certainly for 2018, to cover 90-95% of population. But broadband speeds increased on our side.”

Globe Telecom declined to comment pending receipt of the decision.

Meanwhile, the Internet Society of the Philippines said the deal did not actually result in a significant improvement in services, but rather blocked out a potential third player that could have evened out the playing field.

ISP’s chair Winthrop Yu said, “we have not seen any improvement in the service that resulted in the acquisition. The deal should be reviewed by the PCC because it is part of the PCC’s job. Whether or not it will improve, the point is that the control of the two over the spectrum allocation is already highly dominant to block out competition.”

In April, the PCC sought relief from the Supreme Court by asking it to lift the CA’s preliminary injunction barring the body from reviewing the deal. Balisacan said though they have yet to iron out their next move, they are prepared to pursue the issue at the Supreme Court.

The PCC likewise said in a statement that the public’s perennial lament of slow and expensive telco services fuels their resolve to pursue the issue.