Globe Telecom and Philippine Long Distance Telephone Co. (PLDT) have preempted the decision of the courts when they completed their payment for San Miguel Corp.’s (SMC) telecommunications assets under a P69-billion blockbuster deal.
“The PCC (Philippine Competition Commission) stands by its position that Globe and PLDT should not have proceeded with the payment of their final installment on the (telecommunications) deal, considering pending cases filed before the Supreme Court (SC) and the Court of Appeals (CA),” the anti-trust watchdog said in a statement.
“Completing the payment for the telco assets is a move that unduly preempts the forthcoming rulings of the SC and CA,” it added.
Globe, however, said the final payment for the purchase of SMC’s telco assets, despite a pending petition filed by the PCC, before the courts was legal.
Globe and PLDT have paid P13 billion as final installment for their joint acquisition of the P69.1-billion 700 megahertz (700 MHz) frequency spectrum held by SMC’s Vega Telecom last year.
“Without any legal impediment or court order, Globe has proceeded and completed the transaction.
These include the network roll-out of the 700MHz nationwide, co-use of spectrum between Globe and San Miguel, and the full payment of the commercial agreement,” Globe General Counsel Froilan Castelo said in a statement.
Castelo added that it is in compliance of all regulatory requirements in completing the contractual obligation in the acquisition of the telco assets of San Miguel and that Globe did not violate any rule or prevailing law at the time the transaction was signed.
The PCC, however, stressed that notifying PCC of the companies’ big-ticket deals is a compliance to the law, and the notification should not be filed “merely for the sake of submission.”
“As with any transaction required to be notified to the PCC, the P69.1-billion deal needs to be reviewed through a market competition lens to safeguard consumer welfare over the long term,” the PCC said.
“While the PCC guarantees fair evaluation for every notification, compliance with the law should, nevertheless, be complete and transparent.”
Last month, the PCC filed a petition before the SC to lift the CA’s injunction, which blocked the PCC’s review of the Globe and PLDT telco deal with San Miguel.
This was after the CA issued the writ of preliminary injunction last year and denied the PCC’s motion for reconsideration early this year.
PCC Chairman Arsenio Balisacan said his office hopes the SC would decide on the matter soon.
“We hope it will be soon. But we do not have any control or influence on that,” Balisacan added.
Castelo said the PCC’s claim that the telco’s completion of its payment to San Miguel violated the gag order issued by the Court of Appeals (CA) and has preempted the decision of courts.
“This is contemptous and the PCC should be held liable for this,” Castelo said.
PLDT and Globe vowed last year to deliver improved Internet service after the National Telecommunications Commission (NTC) warned the two telco giants to boost Internet speeds within a year or face revocation of its approval for them to take over the spectrum owned by SMC.
Globe Telecom expressed optimism that it will be able to meet the growing demand for home broadband Internet amid the latest Akamai Report that showed improvement of broadband speed and adoption in the country.
Senior Vice President of Globe at Home Martha Sazon stated that the report was a validation of its endeavor to continue improving the state of Internet in the Philippines.
“Our reports are finally bearing fruit and we expect overall internet experience to improve further moving forward as we continue the aggressive deployment of leading edge network technology, as we progress toward serving 2 million homes by 2020 with high-speed internet,” Sazon said in a statement.
Globe Internet at Home customers grew to 1.2 million in the first quarter of 2017, representing an 8.8-percent growth year-on-year. This is a result of its aggressive push for affordable home broadband plans, with the majority of customers subscribing to a Globe at Home Plan 1299 at 10 Mbps.
The telco envisions creating an internet superhighway by deploying fiber-optic cables in 20,000 villages all over the country to provide faster and more reliable internet access in about 2 million homes nationwide.
Sazon said Globe is committed to expanding its network coverage and enhancing its capacities for fixed-line internet, while adoption of home internet has been steadily improving.
“With home broadband plans becoming more and more affordable, we expect overall broadband adoption to grow, and in effect, overall speed to grow, as well,” she added.
Sazon also said that, due to a history of underinvestment in the area of fixed broadband, little or no support from the government and permitting issues, the Philippines remained stagnant in terms of fixed broadband adoption and speed worldwide.
“This prompted the telco industry to catch up by addressing the huge infrastructure gaps in contrast with its Asian neighbors,” she added.
She said the country has seen significant improvement in internet speed and adoption, compared to previous years since Globe shifted its focus to home broadband in 2016.
“Globe is now leading the charge in improving internet at home in the Philippines, as we did in mobile,” Sazon said.
Akamai Technologies revealed in its State of the Internet Connectivity Report for the first quarter of 2017 that the Philippines showed significant improvement in broadband speed and adoption.
In the report, the Philippines average fixed broadband speed is up 20 percent quarterly and 57 percent yearly at 5.5 Mbps.
The country also registered the strongest growth in the Asia-Pacific region in terms of “above 4 Mbps connectivity adoption” at 39 percent adoption rate, growing 26 on a quarterly basis and a robust 111-percent annual growth.
Higher bandwidth adoption rates more than tripled from 2016. For above 10 Mbps connectivity adoption, the country showed a 11 percent adoption, growing by 55 percent quarter on quarter (QoQ) and a remarkable 330 percent year-on-year.
For 15 Mbps connectivity adoption rate, the country showed steady improvement in adoption at 3.6 percent, up 52-percent QoQ and 373 percent year-on-year.