(Corrects title to say buyout was legal and aboveboard)
According to one of the Philippines' telecommunications giants Globe Telecom Inc through its counsel, its acquisition of lesser rival Bayan Telecommunications Inc was legal and aboveboard.
In a statement, Globe legal counsel Froilan Castelo, "This is a valid restructuring and rehabilitation program promulgated by the Pasig RTC (Regional Trial Court) Branch 158."
"This is unlike PLDT's monopolistic acquisition of Digitel-Sun since Digitel-Sun was a very healthy competitor that was eating, in fact, into PLDT-Smart's market share. This time, there was broadly-based recognition of the need to rehabilitate Bayantel - foremost among which were its major creditors like Goldman Sachs Group, Clearwater Capital Partners, Avenue Capital and the U.K.-based Spinnaker Capital," Castelo added.
Globe was claimed to have undertaken the same circumstances another national telecommunications company had done with a smaller rival. Philippine Long Distance Telephone Co (PLDT) acquired the operator of Sun Cellular, Digital Telecommunications Philippines Inc, two years ago. Sun was one of the major mobile providers next to Globe and Smart Communications.
Castelo also disclosed that Globe's takeover will allow Bayantel to retain its operations and would ensure that all 1,100 workers of the latter could keep their jobs. Bayantel serves around 500,000 customers all over the Philippines.
PLDT said in a position paper that Globe's acquisition of Bayantel threatens the healthy competition in the Philippine telecommunications market. Globe is to acquire a 56.6% ownership stake in Bayantel. Moreover, the transfer of Bayantel's frequencies to Globe will enable to latter to acquire frequency amounts that are disproportionate to the latter's subscribers. Globe will have control of more than 22.5 megahertz of the combined 1800 megahertz 2G bandwidth.
PLDT said Globe's mobile market share is at 32% with a 27 million subscriber base. PLDT, on the other hand, has 68% of the market share with a 60 million subscriber database.
Regarding competitive claims by PLDT, Castelo said for Globe, "We can say this early that the RTC Master Restructuring Agreement does not propose an anti - competitive, anti-consumer nor an unfair trade practice."
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