PLDT, Digitel merger needs Congress approval – Arroyo

April 4, 2011 10:32 pm 

MANILA, April 4 -– Senator Joker Arroyo said on Monday that the reported P74-billion merger plan of the Philippine Long Distance Telephone Co. (PLDT) and Digitel Telecommunications Philippines Inc. requires approval of Congress.

Arroyo also hit the National Telecommunication Commission (NTC), the Securities and Exchange Commission (SEC), PLDT and DIGITEL for not informing Congress about the merger plan.

”The NTC, SEC, PLDT and DIGITEL are talking among themselves about the merger, or sale, in whole or in part, or of the controlling interest of DIGITEL to PLDT as if Congress does not exist,” Arroyo said.

Citing the terms of Section 16 of the congressional franchise, Arroyo said the DIGITEL “shall no less transfer, grant the usufruct of, sell nor assign” its franchise to any company “without the prior approval of the Congress of the Philippines.”

”They cannot just do that without congressional approval. Nor can NTC and SEC act on it. 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 Houses of Congress,” the veteran lawmaker further explained.

Arroyo clarified that he is not questioning the capability of the PLDT, the country’s giant telecommunication company, to operate the merged companies “because empirically they are competent.”

"But a franchise by itself is a monopoly granted to an entity by Congress," he pointed out.

Arroyo said the Congress has the duty to ascertain “whether the transaction between PLDT and DIGITEL, will serve the public interest.”

Senate minority leader Alan Peter Cayetano supported the opinion of Arroyo, saying the NTC and the SEC should not permit the merger without informing first the Congress.

Last Friday, Senate committee on public service chairman Senator Ramon ‘Bong’ Revilla Jr. has the NTC to look into possible negative effects of the PLDT’s acquisition of Digitel on the local telecommunication industry.

”The NTC, being the country's Telecoms regulator, is in the best position to assess the impact of this transaction on consumers and the public in general,” Revilla said.

Revilla, chairman of the Senate committee on public service, has ordered the NTC to submit the report to his committee next week.

”While a change of ownership of corporations is usually ordinary business, this is not the case here as telecommunications is imbued with public interest, and we must ensure that public interest is upheld in this transaction,” Revilla said.

Revilla believed that the NTC should give consideration to the fact that if the acquisition pushes through, Philippine Long Distance Telephone Co. will “undoubtedly be owning a great chunk of the mobile phone industry,” being the owner of Piltel, Smart, Cure, and eventually Digitel. (PNA) DCT/JFM

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