Globe asks gov't to look into PLDT-Digitel deal

ABS-CBN News

Posted at Apr 15 2011 07:57 PM | Updated as of Apr 18 2011 10:58 PM

MANILA, Philippines - Ayala-owned Globe Telecom Inc. has asked the government to study whether PLDT's planned acquisition of third-ranked Digital Telecommunications Philippines Inc. (Digitel) would create an uneven playing field in the telco sector.

Globe corporate communications head Yoly Crisanto said they have asked the National Telecommunications Commission (NTC) to determine the possible effects of the merger.

"Will consumers be given a choice?" she said.

PLDT has agreed to acquire 51.55% of Digitel, and would undertake a mandatory tender offer to minority investors, for a total consideration of P74.1 billion.

Various sectors have raised concern over the deal, saying it could kill competition in the market and push up mobile product prices.

Digitel is popular for its bucket-priced offerings, which earlier triggered a price war among local telco's and eroded profit margins of the larger players.

Upon closing of the PLDT-Digitel transaction, PLDT is expected to solidify its position as the country's top telco firm, cornering about 70% of the mobile phone market to the disadvantage of Globe.

PLDT, however, assured that operations of its unit Smart Communications Inc. would remain separate from that of Digitel. It said the synergy that would result from the acquisition would be beneficial to consumers.

Digitel, for its part, promised to continue offering unlimited voice and text services.

According to NTC Commissioner Gamaliel Cordoba, President Aquino has already ordered a probe into the PLDT-Digitel deal. He said they will coordinate with the President's economic team as well as the Department of Justice on this.

He also said that they are just waiting for PLDT to send the details of the transaction. - Report from Willard Cheng, ABS-CBN News