Diversified conglomerate San Miguel Corp. on Tuesday said that the legal challenges against its ownership of the 700-megahertz (MHz) frequency spectrum prompted them to give up and sold the same to the country’s two giant telcos.
In a press briefing on Tuesday, Ramon Ang, president and chief operating officer of SMC, explained that the move to sell their telco assets was a “very hard decision.”
“It was a very hard decision for the company when we discussed it with the management. But the reason [why we sold our broadband]was we think it is going to be a long drag in court proceedings, and that it would be a disservice to the consumers by holding on to that frequency and wait for the foreign technical partner,” Ang said.
He explained further, “Possible foreign partners are also afraid because of the legal challenges.”
The legal challenges that Ang is referring to are allegations made by Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc. that SMC’s ownership of the 700 MHz spectrum was “anti-competitive,” and therefore legally questionable, especially since SMC while owning it had no subscribers yet.
PLDT and Globe on Monday announced that they have teamed up to acquire the telco assets of SMC valued at P70 billion.
Under the deal PLDT and Globe will purchase 50 percent each of the equity interest of SMC’s telecommunication business, which is held by Vega Telecom Inc. for P69.1 billion.
Despite the substantial windfall of proceeds from the sale of its telco assets, Ang said that such P70 billion merely translated into SMC as “cost recovery.”
“This is just a cost recovery, we hardly make anything from the investment of telco assets.
We did not really put a premium to the amount because we want to make sure that both PLDT and Globe will do this deal quickly, to provide the better broadband service, which they were promising,” Ang said.
The top executive, however, said that all he can guarantee from the sale was “much, much better service” from Globe and PLDT, but that improved future service would not necessarily result in lower charges.
“All I can say is that PLDT and Globe will be able to provide much, much better service to their respective subscribers,” Ang said.