MANILA, Philippines – The P69-billion deal to buy all of San Miguel Corporation's telecommunication businesses was done in a hurry to allegedly "evade" the the Philippine Competition Commission's (PCC) rules, the anti-trust body said in a court comment.
In a 122-page comment filed on Friday, August 11 with the Court of Appeals' (CA) 12th Division, the PCC said "the haste with which the notice and the acquisition were made reveals petitioner's (PLDT Incorporated and Globe Telecom Incorporated) intention to evade a full review of the transactions."
The PCC made the comment in response to PLDT's and Globe's petition to stop the independent body from reviewing the buyout deal.
The two telecommunications giants are now jointly seeking a court order against the PCC, after the CA approved the consolidation of petitions.
This was after the CA 6th Division junked Globe's separate petition to stop PCC from reviewing the deal.
"Fully aware that the acquisition will be subject to PCC's regulation and its (implementing rules and regulations) IRR once it takes effect, PLDT and Globe post haste to seal the transaction," PCC told CA in its comment.
It was on May 30 when PLDT and Globe bought all of San Miguel’s telecommunications assets for P69.1 billion. San Miguel was supposed to launch a 3rd major telco player this year.
This was before the PCC published its IRR on June 4. This means the P69.1-billion deal is covered by the commission’s transitory rules.
Why the deal is needed
According to PCC's comment, the San Miguel telco buyout was mainly made to access the frequencies within the high-quality 700 MHz spectrum – which is able to travel longer distances, require few cell towers, as well as penatrate through building walls, elevators, and even through underground parking lots.
"No wonder the petitioner and Globe moved heaven and earth to acquire this spectrum," PCC said.
"In acquiring SMC's assets that would enable them to access the 700 MHz spectrum, PLDT and Globe made a conscious effort to ensure the acquisition will be beyond the reach of the law," it added.
PCC said the speed in which PLDT and Globe made the acquisition deal is meant "to evade the IRR" and is "nothing short of bad faith on their part."
"It indicates a strong resolve to entirely avoid a scrutiny of the transaction, which conduct should not be countenanced by the courts," PCC added.
PLDT legal counsel Ray Espinosa had denied that the timing of the deal was meant to avoid PCC scrutiny.
"It was even years ago when we first sought for government intervention for the reallocation of the unused spectrum held by San Miguel," Espinosa had said on the sidelines of the Smart Unbox event in Taguig City last month.
The legal battle stems from PCC's decision to review the deal to see if it were in consumer interest. It then rejected both PLDT and Globe's initial transaction reports, which the two firms have since resubmitted.
All 3 players met on July 8, for a dialogue. Following the meeting, the PCC maintained its position that the acquisition "is not deemed approved." (READ: PCC, telcos meet to discuss San Miguel telco buyout)
But the telcos stood their ground, saying the deal is already "deemed approved" and "may no longer be challenged" by the PCC.
Meanwhile, the National Telecommunications Commission (NTC) has approved the frequency co-use arrangement between Smart, Globe, PLDT, and SMC's Bell Telecommunications Incorporated.
For PCC, the NTC "did not make any determination of the anti-competitive nature of the co-use agreement." – Rappler.com