Lawmaker: PLDT-Digitel deal needs congressional approval

April 5, 2011

TELECOMMUNICATIONS company PLDT’s acquisition of third-ranked Digitel cannot take place without approval from Congress, a senator said Monday.

“PLDT and Digitel both operate by virtue of a legislative franchise and they are governed by the terms of their respective franchises granted by the two house of Congress,” Senator Joker Arroyo said.

“The law is very strict on that,” he said at a press conference Monday.

Section 16 of Digitel’s franchise says it cannot “sell nor assign this franchise or the rights and privileges acquired.”

The franchise also prohibits the former Gokongwei-led company from merging with another company or transfer controlling interest “without prior approval of the Congress of the Philippines.”

The telcos will need to apply for a franchise again and sit through congressional hearings for the acquisition to push through, Arroyo said.

Arroyo explained lawmakers will have to study how the acquisition will affect the public.

He said the telcos, the National Telecommunications Commission, and the Securities and Exchange Commission are discussing the acquisition “as if Congress does not exist.”

“They cannot just do that without congressional approval. Nor can NTC and SEC act on it,” he said.

Arroyo said he is not questioning PLDT’s ability to run Digitel since the telco is “empirically competent.”

He said Congress has to exercise oversight on franchises even after they are granted.

But NTC Commissioner Gamaliel Cordoba said in a telephone interview that there have been no talks between them and SEC.

“We have not received any official documents from either PLDT or Digitel regarding the acquisition, although we have requested it from them last week,” Cordoba added.

He said the NTC still does not know when the details of the acquisition will be final, or when the telcos will submit documents. He agreed, however, that the acquisition will need to go through Congress.

Last week, Senator Ramon Revilla Jr., chairman of the Senate committee on public services, told the NTC to submit a report on how the acquisition will affect subscribers.

Revilla said PLDT, which already owns Smart Communications, Piltel,
and CURE (Red Mobile), will “undoubtedly be owning a great chunk
of the mobile phone industry” because of the deal.

According to its website, Smart had 45.6 million mobile phone subscribers as of December 2010. Digitel’s Sun Cellular, on its website, says it has “more than 15 million subscribers.”

Sun.Star tried to get reactions from PLDT and Digitel but was told to wait for their official statements. (Jonathan de Santos/Sunnex)



Pampanga Angeles City Fine Dining Restaurant serves classic French Cuisine accompanied by matured vintage wines from Bordeaux, Burgundy and Rhone.


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Yats Restaurant & Wine Bar

Mimosa Drive past Holiday Inn, Mimosa Leisure Estate,

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(632) 637-5019   0917-520-4393  Rea or Chay


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Mimosa Golf Estate, Clark Field (Clark Airbase), Clark Freeport Zone, Pampanga, Philippines
Tel: (045) 599-5600 0922-870-5194 0917-520-4401 Ask for Daniel, Lito or Cosh

Banquet, Events and Functions, Manila Sales Office 3003C East Tower, Philippines Stock Exchange Center
Exchange Road, Ortigas Center, Metro Manila, Philippines
Tel: (632) 633-1566 ask for Rea or Chay

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