The Philippine Long Distance Telephone Co. (PLDT) is opposing the joint application of Globe Telecom Inc. and Bayan Telecommunications Inc. to the National Telecommunications Commission (NTC) regarding changes in the controlling interest in BayanTel.
In a letter to the NTC, PLDT said that it is opposing the joint application of Globe and BayanTel regarding the Ayala-led telecommunication firm’s taking a controlling interest in the beleaguered Lopez-led company.
“In the spirit of promoting a robust competitive environment as contemplated under Republic Act 7925, or RA 7925, which entails fair and equal treatment of all players, PLDT is constrained to participate in this proceeding and make known its opposition to the joint application of Globe and BayanTel. PLDT stands to be prejudiced by Globe and BayanTel’s joint application because if granted, these two separate entities will unlawfully combine the radio frequencies separately allocated to them earlier by competitive bidding,” PLDT said.
PLDT also said that the joint application filed by Globe and BayanTel perpetuates an anti-competitive and anti-consumer telecommunications environment. Moreover, the joint application, if granted, will allow Globe and BayanTel to circumvent the well-established rules on allocation of frequencies.
Globe earlier asked the NTC for the approval of the change in the controlling interest in BayanTel.
“We reiterate that the restructuring of the debts and Globe’s conversion into equity could further strengthen collaboration with BayanTel in respect to our leg networks, corporate data and broadband businesses,” said Ernest Cu, president and chief executive of Globe.
On October 11, Globe and BayanTel filed a joint application for NTC’s approval for the change in the controlling interest of the Lopez-led telco.
“They opposed. During the first hearing, November 4,” said Froilan Castelo, head of Corporate and Legal Services Group of Globe.
He added that, “The opposition of PLDT was no. 1: the total spectrum of Globe and BayanTel will be grossly disproportionate to our number of subscribers. BayanTel is just second generation [network].”
“This is good for the country, the merger of BayanTel and Globe. It’s good for the industry,” Castelo further said.
In October, the first tranche of conversion of debt-to-equity was completed after BayanTel issued common shares to give Globe a 39-percent equity stake.
A Pasig regional trial court earlier issued a resolution approving the debt restructuring plan and the new master restructuring agreement submitted by Globe, BayanTel, and Bayan Telecommunications Holdings Corp.
Under the plan, Globe would acquire a 56.6-percent stake in BayanTel through the conversion of 69 percent of BayanTel’s total debt.
BayanTel noted that the new restructuring program would make it immediately “productive” unlike under the original plan where creditors would have to wait until 2023 to get paid.
The Globe debt initiative would reduce the outstanding principal debt of BayanTel by 69 percent to $131.3 million from $423.3 million.
BayanTel’s outstanding debt stood at $497 million when it was placed under corporate rehabilitation in 2004.
The Lopez-led telco firm settled a total of P8.19 billion in debt since it filed for supervised rehabilitation proceedings under the regional trial court in Pasig City, and intends to pay its $325-million outstanding debt before 2023.