Two dominant operators in the market, Globe and PLDT, said yesterday that they have paid the final instalment on a $1.39 billion deal to buy up the telecoms business of a rival, San Miguel.
They “should not have proceeded with the payment”, said the Commission, saying that the deals were still subject to cases before the country’s Supreme Court and its Court of Appeals.
“This big ticket deal goes beyond the purchase itself because of its impact on public interest,” the Commission added=, saying the deal “needs to be reviewed through a market competition lens to safeguard consumer welfare over the long term”.
Globe’s general counsel, Froilan Castelo, retorted that the Commission itself “is in violation of the gag order issued by the Court of Appeals”, because the cases were still before the courts. “This is contemptuous and PCC should be held liable for this,” added Castelo.
PLDT did not comment on either the transaction or the Commission’s statement, but public affairs head Ramon Isberto told Manila’s Business World: “We have made final payment for the Vega transaction. In doing so, we are simply complying with our payment obligation under the contract with [San Miguel], the performance of which has not been enjoined by any court order.”
PLDT and Globe agreed a year ago to buy Vega Telecom, the telecoms assets of San Miguel, in a 50-50 split. That move came just weeks after Telstra abandoned talks about a possible joint venture with San Miguel. The attraction to both Globe and PLDT was Vega’s under-used spectrum, but the deal took a competitor out of the market which the two dominate.
