Purchase of Digitel by PLDT fair - DTI

MANILA, Philippines - The Department of Trade and Industry (DTI) said the acquisition of Digital Telecommunications Philippines Inc. (Digitel) by Pangilinan led Philippine Long Distance Telephone Co. (PLDT) is a fair deal for all parties concerned even the consumers.

In an interview with reporters over the weekend, Trade and Industry Secretary Gregory L. Domingo said that there seems to be no monopoly in the deal because the resources are distributed among the players in the telecommunications industry.

“Based on what I’ve read wherein there will be some reallocation of frequency and based on the conditionality and compromises it seems like a fair deal for the parties concerned including the consumers,” Domingo said.

He explained that in order for something to be called a monopoly, there must be one player who will dominate the use of the resources. Domingo said that because the deal was very clear on the reallocation of resources, there is no danger of one firm monopolizing the entire industry.

“The most critical basis is the monopoly of resources because if you monopolize the resources the tendency is really a monopoly but if the resources are distributed then there is a chance for competition,” he stressed.

Domingo further noted that the size of the market share is not the basis for declaring a monopoly in the industry. “Market share is not a determinant of monopoly but the allocation of resources.” Domingo noted that as long as other players are free to enter the industry and there is a freedom to compete then it is okay even if one firm has the lions share of the market.

“The competition in the telecom industry is good. It is one of the areas wherein there is true competition,” Domingo added.

Last month, PLDT has has finally completed the landmark P69.2 billion acquisition of a majority interest in Digitel after obtaining the approval of the National Telecommunications Commissions (NTC).

The deal, which will create a telecommunications gist with a market share of about 70 percent, was approved by the NTC subject to some conditions aimed at ensuring competition as well as consumer welfare.

PLDT said it has accepted the conditions which include assurance that Digitel will continue to provide its nationwide “unlimited” type of services to the public as well as the divestment of subsidiary Connectivity Unlimited Resources Inc. (CURE).

With PLDT’s acquisition of Digitel, the firms said consumers are expected to begin realizing the substantial benefits to be reaped from the combined expertise, resources and capabilities of the PLDT Group and Digitel. “PLDT is extremely pleased to welcome Digitel to the PLDT Group,” said PLDT chairman Manuel V. Pangilinan.