Senators want Senate approval over PLDT’s Digitel acquisition

Senators on Monday reminded Philippine Long Distance Telephone Co. (PLDT) that it cannot buy a majority stake in Sun Cellular operator Digitel Telecommunications Philippines Inc. without their approval. Senate Minority Floor Leader Alan Peter Cayetano and Senator Joker Arroyo said that both telcos operate within the realm of a legislative franchise given by the Senate and the House of Representatives. "Very strict ang nasa batas, na ang franchise ay hindi puwedeng ilipat nang walang congressional approval (What is in the law is very strict, that a franchise may not be transferred without congressional approval)," Cayetano said during Monday’s press briefing. Arroyo likewise said that the National Telecommunications Commission and Securities and Exchange Commission cannot act on the deal between the two companies without their go signal. "The operations of public utilities, like PLDT and Digitel, are coupled with a public interest. Congress has the duty to ascertain whether the transaction between PLDT and Digitel will serve the public interest," Arroyo said in a statement. According to Section 16 of Digitel’s Congressional Franchise, the firm "shall not lease, transfer, grant and usufruct of, sell nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity, nor merge with any other corporation or entity nor shall the controlling interest of the grantee be transferred, whether as a whole or in parts and whether simultaneously or contemporaneously, to any such person, firm, company, corporation or entity without prior approval of the Congress of the Philippines." Section 20 of the same franchise says that it is "subject to amendment, alteration or repeal by the Congress of the Philippines when the public interest so requires and shall not be interpreted as an exclusive grant of the privileges herein provided for." Arroyo noted, however, said that they are not saying that PLDT is not "fit" to operate the merged companies because "empirically they are competent." PLDT already owns Smart Communications Inc., Connectivity Unlimited Resource Enterprise Inc. (Red Mobile), and Pilipino Telephone Corp. Cayetano explained that they just need to determine the overall effects of the acquisition on the market and the consumers. The Senate committee on public services earlier ordered the NTC to study the possible effects of the deal. — VS, GMA News