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Wednesday, June 19, 2024

PCC eyes deeper review of tower firms merger

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The Philippine Competition Commission (PCC) is taking a closer look at the proposed merger of independent telecommunications tower companies.

It said it launched a phase 2 review, which involves a more thorough investigation, on the deal between PTCI Holdings Pte. Ltd. (PTCI), Connect Infrastructure (Philippines) Pte. Limited (CIP) and Meralco Industrial Engineering Services Corp. (MIESCOR).

The companies notified the PCC on Feb. 21 of their proposed transaction to form a joint venture through the acquisition of shares in a newly-established company named Pylon Holdings Corp. (Pylon).

PTCI, through its domestic holding company PTCI Assets Holdings. Inc. (PAHI), owns Phil-Tower Consortium Inc. (Phil-Tower PH), an independent tower company. CIP and MIESCOR jointly control MIESCOR Infrastructure Development Corp. (MIDC), another independent tower company.

The proposed joint venture would grant Pylon full ownership of both Phil-Tower PH and MIDC.

The parties emphasized the complementary nature of Phil-Tower PH and MIDC’s businesses in their notification to the PCC. The new company aims to offer mobile network operators a broader coverage of towers by combining the geographic reach and diverse capabilities of both corporations.

The PCC said that due to limited information obtained during the phase 1 review, it directed the PCC Mergers and Acquisitions Office (MAO) on May 4 to launch a phase 2 review to thoroughly assess the impact on competition.

It will focus on validating the nationwide distribution of passive towers; examining the monitoring processes implemented by regulatory agencies; and analyzing the duration and terms of long-term contracts between independent tower companies and mobile network operators.

It will also evaluate potential entry and expansion of competitors in the tower leasing market, considering timeliness, sufficiency, and likelihood, and verify if the transaction will create any conglomerate effects.

The Philippine Competition Act of 2015 empowers the PCC to scrutinize mergers and acquisitions to ensure such deals don’t significantly reduce competition in relevant markets and ultimately harm consumer welfare.

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