CA upholds sale of SMC telco assets to Globe, PLDT

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PLDT and Globe insist their ₱70-billion purchase of San Miguel's assets was already "deemed approved" when they notified the competition body of the transaction.

Metro Manila (CNN Philippines, October 23) — The appeals court has affirmed the P69.1-billion deal for Globe Telecom Inc. and Philippine Long Distance Telecommunications (PLDT) to acquire a telecommunications subsidiary of San Miguel Corporation (SMC).

 In a 54-page decision on October 18 released Monday, the court  granted the petition of both companies to nullify the Philippine Competition Commission's (PCC) plan to investigate the buyout of Vega Telecom Inc. (VTI).

The court ordered the PCC to recognize the deal, saying it is "deemed approved by operation of law and may no longer be challenged under the Philippine Competition Act."

The law ensures fair market competition and prohibits anti-competitive agreements, mergers, and acquisitions of assets.

Globe and PLDT bought the outstanding shares of VTI in May 2016. The buyout came after partnership talks between the conglomerate and Australian telecom company Telstra Corp. Ltd. fell through.

The 700-megahertz band is considered key in providing faster internet speed because it can easily pass through walls and has wider signal coverage. 

While Globe and PLDT claimed their purchase of VTI shares would improve internet services in the country, the PCC wanted a review of the transaction which it found "deficient and defective in form and substance."

The Cout of Appeals ruled that the PCC "gravely abused its discretion," saying  that the time for the government body to rule on the review had already lapsed.  

It issued a writ of prohibition to stop the PCC from conducting a full review of the deal.

PCC: No copy of CA decision yet

In a statement, the PCC said it had not yet receive an official copy of the decision.

"Rest assured, however, that we will take the appropriate legal steps to move this multi-billion acquisition case forward," the statement read. "We are firm in our resolve to perform our mandate under the law. We note that a year after the sale, the public continues to complain of slow, expensive and poor quality of internet and mobile services. If anything, this has further fueled our determination to safeguard the market and promote the interests of consumers."