NTC starts review of PLDT, Digitel merger

By Vernadette Joven (philstar.com)

An official of the National Telecommunications Commission (NTC) said today that the agency is taking into consideration the position paper submitted by Globe Telecom on the merger announcement made by PLDT and Digitel.

In a phone interview with Philstar.com, NTC commissioner Gamaliel Cordoba said that they already began the review of the merger and will consider Globe’s position paper as an input and part of the review.

“I already read the letter and we at the NTC together with the Department of Justice and the economic team are already studying the PLDT-Digitel deal, as mandated by President Aquino,” Cordoba said.

The NTC official, meanwhile, asked for patience from the stakeholders because it would take some time before they can issue a decision on the controversial merger.

He said they have to take into consideration a lot of factors coming from different business industries that would be affected by the merger.

Two weeks ago, during the field training and live firing exercises for Balikatan 2011 in Nueva Ecija, President Benigno Aquino III said he would order NTC, the Department of Justice and his economic team to study the merger thoroughly.

“We want to ensure that there is a level playing field,” President Aquino said.

In its position paper, Globe cited threats to free competition and urged the NTC to act within its legal mandate to enforce and implement the Public Telecommunications Policy Act.

“If they (NTC) must approve the deal, do so but there are rules to follow which is already being commonly practiced in other countries,” said Atty. Rodolfo Salalima, chief legal counsel of Globe Telecom.

Salalima added that the NTC should no longer wait for PLDT to submit documents pertaining to the merger to determine whether it breached the clause of free competition.

He said that the NTC should also be able to clear the frequency allocation issue and whether the dominant carrier should return part of its frequency back to the government.

The PLDT Group, which already filed the acquisition deal last week, remains optimistic that they will be able to obtain the necessary approval before the deadline they set for the merger by the end of June.

Atty. Ray Espinosa, PLDT head of regulatory affairs and policy, calls the issues raised by Globe as a regulatory blackmail to gain leverage and exact concessions from PLDT, through NTC.

“Globe speaks of monopoly even as its controlling shareholder, have institutionalized combinations in restraint of trade, which is illegal,” Espinosa said.

Espinosa said that the issue on frequency allocation should focus on the efficiency of frequency utilization and subscriber base/usage, not on the network infrastructure, which is dependent on investment.

He added that they even have pending requests from NTC for more frequency allocation to serve more subscribers since the company has already fully utilized the frequency allocated to them.