PLDT and Globe Telecom’s joint acquisition of the telecom assets of San Miguel Corp (SMC) has been ruled legal by the Philippines’ Court of Appeals.
The Philippine Competition Commission (PCC) had begun an investigation into the PHP69.1 billion ($1.4 billion) deal, which was signed in May 2016. The operators filed a legal challenge against the probe, and now that the deal has been ruled legal the antitrust body must abandon its review.
The court ruled that the PCC did not have the authority or expertise to investigate the deal, and that any investigation must be carried out instead by the National Telecommunications Commission. It dismissed the PCC’s claim that the probe must be carried out ahead of the deal closing in order to assess its potential effect on public welfare.
It also noted that the PCC had “committed grave abuse of discretion” by failing to adhere to its own rules following the announcement of the deal. In June 2016, the antitrust body decried PLDT and Globe for acting ahead of pending court rulings when they closed their acquisition of SMC’s assets by paying the final instalment.
Following this episode, in July last year Globe and PLDT filed for temporary restraining orders against the PCC, effectively stymieing its investigation. The next month, the body disclosed its opinion that competition would “likely” be adversely affected by the deal.
Between them, PLDT’s mobile unit Smart and Globe account for 99% of the Philippines’ mobile connections. Prior to their joint acquisition, SMC was mulling over whether to launch a third mobile player in partnership with Australia’s Telstra to foment stronger competition in a market that sorely requires it.
The country’s president Rodrigo Duterte warned Smart and Globe in October last year that if they failed to address complaints about the quality of their service, he would allow Chinese competitors into the market.