Aquino concerned over PLDT-Digitel merger

PRESIDENT Benigno Aquino III on Wednesday expressed concern over the possible implications of the merger between the Philippine Long Distance Telephone Co. (PLDT) and its competitor Digital Telecommunications Philippines Inc. (Digitel).

Aquino said he would sit down soon with his economic team, the Department of Justice, and the technical team of the National Telecommunications Commission to discuss the impact of the merger on consumers.

"I am concerned enough to warrant a study," the President told reporters in ambush interview during the Balikatan Exercise 2011 at Fort Magsaysay Nueva Ecija.

“There are allegations, amongst them from Globe and we want to ensure that there is a level playing field so we have so many technical aspects here,” he added.

Presidential Development and Strategic Planning Secretary Ramon Carandang said the government decided not to intervene yet but the economic managers are discussing what possible actions to take if the merger happens.

Carandang said Trade Secretary Gregory Domingo has been looking into the matter even before the President raised his concern.

“Some of the economic managers have raised concerns about the impact that the merger might have on consumers, on the price of the service that consumers pay for their cell phone services. There have been concerns about the impact that that will have on the structure of the market whether that will become more or less free,” he said.

Carandang noted that one of the priority bills submitted during the recent Legislative Executive Development Advisory Council (Ledac) was the Anti-trust bill, “which regulates the ability of a company to engage in monopoly practices”.

“I am not saying that we will be enforcing antitrust action here. But the antitrust legislation that we submitted to Congress may be the framework by which large mergers and acquisitions like this that have a market impact can be considered,” he said.

Globe Telecom Inc. has called for an investigation into the merger saying that “it could turn the competitive telecommunications industry into a virtual monopoly.”

If the merger is sealed, PLDT will have more than two-thirds of industry revenues and have a subscriber base of seven in every 10 mobile users in the Philippines.

Globe president and CEO Ernest Cu earlier said a single dominant telecommunication market could dictate pricing that would have bad effects to consumers. (Jill Beltran/Sunnex)