PLDT calls Globe bid to take over Bayantel ‘anti-competitive,’ ‘grossly unfair’

Claiming “it perpetuates an anti-competitive and anti-consumer telecommunications environment,” the Philippine Long Distance Telephone Co. (PLDT) protested Globe Telecom and Bayan Telecommunications Holdings Inc.'s (Bayantel) joint application for the approval of a debt-to-equity conversion that would allow Globe to acquire a 56.6-percent interest in Bayantel.

In a verified opposition filed at the National Telecommunications Commission (NTC), PLDT said
rival Globe's planned takeover of Bayantel would allow the telcos to use each other's property, services and infrastructure, including radio frequencies. This would give Globe an amount of frequencies disproportionate to its number of subscribers, it said.

With the acquisition, Globe would have access to 95 MHz of frequencies—Bayantel’s 50MHz for 4G frequencies added to Globe's 45 MHz. PLDT, through units Smart Communications and Digitel, only has access to 35Mhz for 4G bandwidth.

However, said PLDT, Globe's subscribers only account for 32 percent of the cellular market compared to PLDT’s 68-percent market share.

“[If] Globe is allowed to control a grossly disproportionate amount of frequencies in relation to its number of subscribers, this would stifle the capabilities of other telcos which would have to strain the frequencies allocated to them thus making it more difficult to provide better services to their subscribers,” said PLDT its 21-page petition.

“It is grossly unfair and anti-competitive for Globe to have access to 42.8 percent more 4G frequencies than PLDT which has double the number of subscribers of Globe,” it also said.

If the NTC approves the takeover, said PLDT, Globe should be ordered to divest the excess frequencies.

Globe head of corporate and legal services Froilan Castelo said the company will answer PLDT's points, and added that Globe's takeover application was not opposed by the Office of the Solicitor General.

In May, Globe and Bayantel owner the Lopez Group asked the rehabilitation court to restructure Bayantel's $423.3-million debt to prevent default.
 
Bayantel’s outstanding debt stood at $497 million when it was placed under corporate rehabilitation in 2004.
 
The current outstanding principal amount of Bayantel’s debt stood at $423.3 million will be reduced to $131.3 million upon a full debt-to-equity conversion.

In September, Branch 158 of the Pasig City regional trial court approved a debt restructuring and master restructuring plan that would cover all of Bayantel's creditors and “ facilitate the entry of Globe into Bayantel as a shareholder,” Globe head of legal service Marisalve Ciocson-Co noted in Globe's disclosure to the Philippine Stock Exchange on Sept. 3. — BM, GMA News