PLDT-Digitel deal needs Congress approval - lawmaker

MANILA, Philippines - The impending merger between Philippine Long Distance Telephone Co. (PLDT) and Digital Telecommunications (Phils.) Inc. (Digitel) still needs congressional approval, Quezon City Rep. Winston Castelo said yesterday.

He said PLDT’s and Digitel’s respective franchises require them to report to Congress any change in ownership so that the House and the Senate could approve such change.

He said the company emerging from the fusion of PLDT and Digitel cannot use the legislative privileges granted to the two partners and would need a new congressional franchise.

Castelo urged the House committee on legislative franchises to hold hearings to ensure compliance with the reportorial and approval requirements, and to determine whether the merger would create a monopoly and stifle competition among telecom players.

PLDT is the country’s largest telecom player, while Digitel is the third largest, behind Globe Telecom. The merged PLDT-Digitel will corner 70 percent of the market.

On Wednesday, PLDT disclosed to the Philippine Stock Exchange that the National Telecommunications Commission (NTC) has approved its deal with Digitel.

Castelo also criticized NTC for its alleged precipitous approval of PLDT’s acquisition of Digitel, saying the agency should have awaited the Supreme Court’s final decision on the issue of PLDT’s ownership.

He said the High Court has ruled that PLDT is a foreign company since more than 60 percent of its common shares are owned by Hong Kong’s First Pacific Group, the investment arm of the Salim family of Indonesia.

Businessman Manuel V. Pangilinan represents First Pacific. PLDT has appealed the Supreme Court’s ruling on the case initiated by the late former lawmaker Wilson Gamboa.

The Constitution requires that public utilities like PLDT be 60-percent owned and controlled by Filipinos.

Castelo said if the Supreme Court sustains its ruling, NTC would have allowed a foreign company instead of a Filipino entity to acquire Filipino-owned Digitel.

“Unless the issue on PLDT’s equity structure is settled, the merger will continue to face legal impediments, leading to further complications. The NTC should have waited for the Supreme Court’s final ruling,” he said.

For his part, Rep. Teddy Casiño of the party-list group Bayan Muna said the PLDT-Digitel merger would effectively create a telecom monopoly, to the detriment of the public.