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Philippine court denies regulator chance to review $1.5 billion telco deal
March 3, 2017 / 5:30 AM / 9 months ago

Philippine court denies regulator chance to review $1.5 billion telco deal

MANILA (Reuters) - A Philippines appeals court has affirmed its order preventing the competition regulator from reviewing a $1.5 billion telecoms deal, a move that could strengthen the telecoms duopoly and further stymie foreign interest in the sector.

The country’s two largest telecom firms, PLDT Inc and Globe Telecom Inc, last year acquired from San Miguel Corp a 700 megahertz spectrum network, prized for its wider reach and compatibility with fourth-generation (4G) telecommunications services.

The Court of Appeals in August agreed to a request by PLDT, which runs cellphone operator Smart, to stop the Philippine Competition Commission (PCC) from reviewing the sale. The PCC said the deal did not follow correct procedures.

The PCC filed a petition, but the court said it lacked merit, according to its Feb. 17 decision, news of which came out on Friday.

The move against the PCC casts doubts on whether tough-talking President Rodrigo Duterte will deliver on his pledge to liberalize telecoms, which he has identified as among several sectors controlled by oligarchs with firms offering substandard services to consumers at high prices.

Mid last year Duterte singled out the telecoms duopoly for failing to improve their services and gave them a year to shape up, or he would open the sector up.

But that is complex, as telecoms is subject to a constitutional clause that limits foreigners to only 40 percent ownership of domestic telecoms company, a disincentive for foreign firms to invest in a fast-growing market of 100 million people.

Critics say the $1.5 billion spectrum purchase by Globe and PLDT was more about keeping out competition than improving bandwidth. The two companies vehemently reject that and say they welcome competition and are making every effort to boost services.

The Philippines is considered by experts to have some of the world’s worst telecoms services and businesses and consumers complain about intermittent data, dropped calls and poor cellular coverage, even in cities.

To get around the problems, many Filipinos carry two phones, one for Globe and another Smart. Though there are two other operators, budget outfits TM and TNT are owned by Globe and Smart respectively, and use their parents’ networks.

PCC said it could not comment on the decision due to a gag order the court had enforced.

Editing by Martin Petty and Stephen Coates

Our Standards:The Thomson Reuters Trust Principles.
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