Recent statements by leading Philippine telco Philippine Long Distance Telephone (PLDT) and number two Globe Telecom have highlighted the ongoing tensions between the two companies over spectrum matters.
On 3 August, PLDT said it asked the National…
Recent statements by leading Philippine telco Philippine Long Distance Telephone (PLDT) and number two Globe Telecom have highlighted the ongoing tensions between the two companies over spectrum matters.
On 3 August, PLDT said it asked the National Telecommunications Commission (NTC) to recall the frequencies of broadcasting company Altimax. PLDT accuses Globe to use those frequencies illegally to provide internet services. In a statement, PLDT further explains that the issue was raised in response to Globe’s allegations over PLDT holding too many frequencies.
Ray Espinosa, PLDT head of regulatory and policy affairs at PLDT, said: “In the case of PLDT and Smart [a subsidiary of PLDT], we are making efficient and productive use of the frequencies assigned to us. There is no basis legal or factual for Globe’s claims that we have ‘excessive’ frequencies that should be returned to the government and handed over to Globe.”
In a statement sent to TelecomFinance today, Froilan Castelo, head of corporate and legal services group at Globe, hit back, saying: “This [Altimax] transaction done in 2009 was fully disclosed with the National Telecommunications Commission and clearly above board. This is old news that PLDT simply wants to resurrect in view of their existing issues with their merger with Digitel.”
In late March, PLDT announced that it would acquire a 51.55% stake in number three Digital Telecommunications Philippines (Digitel) for PhP74.1bn (US$1.7bn).
Soon after, Globe reportedly expressed its concern over the merger between PLDT and Digitel. Globe called on the NTC in late April to issue stronger antitrust policies and that spectrum frequencies should be reassigned so that Globe can better compete with the merged entity, according to reports.
In today’s statement, Castelo called on PLDT to focus on their regulatory and legal battles. In a reference to foreign ownership restrictions for telecom assets, Castelo also accused PLDT of not qualifying as a Filipino corporation.
On 1 August, PLDT had for the second time pushed back the closing date for its Digitel deal to 26 August in order to obtain the necessary regulatory approvals.
In early April, the NTC reportedly said it wanted to review the transaction, which would create a monopoly since PLDT might end up holding three 3G frequencies.
PLDT is also facing questions regarding its ownership, although it claims that the Supreme Court has not ruled that the company is not a Philippine entity.
Foreign investment in a Philippine telecom carrier is restricted to 40% but recently the Supreme Court reportedly clarified that only voting or common shares can be included when calculating the capital stock of a company.
Under this calculation, PLDT would therefore be more than 64%-foreign owned. As a result, the company said, in early July, that it would issue preferred shares with full voting rights to Philippine nationals in order to ease concerns.
It however added, at the time, that “its current share structure fully complies with the Constitution.”
