Globe Telecom asks NTC to cancel all licenses granted to PLDT, Smart, CURE

MANILA, Philippines - Globe Telecom has asked the National Telecommunications Commission (NTC) to cancel and revoke all licenses, frequencies, and authorizations granted to Philippine Long Distance Telephone Co. (PLDT) and its subsidiaries Smart Communications Inc. and Connectivity Unlimited Resource Enterprise Inc. (CURE) since they are not Filipino-owned companies.

In the company’s latest filing with the NTC, Globe chief legal counsel Rodolfo Salalima pointed out that the issuance of various authorizations (certificates of public convenience and necessity) to PLDT, Smart and CURE “are void from the very beginning” considering the recent findings that majority of the voting shares of PLDT are foreign-owned.

PLDT officials, however, said that Globe’s newest filing does not contain any new allegations and is a mere rehash of its earlier unfounded claims.

The NTC is expected to decide in the next few days on PLDT and Digitel’s joint application seeking approval of PLDT’s acquisition of an initial 51.55-percent stake in Digitel, after the case has already been submitted for decision.

“PLDT and all its subsidiaries cannot engage in public service, not being utilities or Philippine nationals in the contemplation of Philippine laws. They are not even entitled to any frequency at all,” Salalima said.

According to him, all the radio frequencies assigned to or acquired by PLDT and its subsidiaries must be divested from them and returned to the State. The grants, assignments and acquisitions of the frequencies, he said, “are void ab initio, legally flawed and thus are legally incurable and beyond remedy in law.”

Globe noted that PLDT, earlier, admitted that of its total voting shares, foreign ownership represents roughly 60 percent, which is against the Foreign Investment Act of 1991 which defines a Philippine national as “a corporation organized under the laws of the Philippines of which at least 60 percent of the capital stock outstanding and entitled to vote is owned and held by citizens of the Philippines.”

He said that independent of the Supreme Court’s ruling in the Gamboa case (now the subject of a motion for reconsideration), PLDT is still not a Philippine national based on the provisions of the FIA, PLDT corporate secretary Lourdes Rausa-Chan’s testimony that “the foreign ownership of the voting shares (of PLDT) only are roughly 60 percent; and PLDT’s 2010 and 2011 General Information Sheets (GIS) filed with the Securities and Exchange Commission which prove indubitably that 60 percent of PLDT’s voting shares are owned by foreigners.

Salalima pointed out that as a foreign corporation, PLDT cannot purchase or acquire control over Digitel Telecommunications Philippines Inc. (Digitel). He noted that under the Public Service Act, it is unlawful for the operator of any public service company to sell or transfer its capital stock to any alien if the move will result in the reduction to less than sixty per centum of the capital stock belonging to Philippine citizens and that “such sale, alienation or transfer shall be void and of no effect and shall be sufficient cause for ordering the cancellation of the certificate.”