THE PHILIPPINE Competition Commission (PCC) has begun a Phase 2 review, which entails a more in-depth assessment, of a proposed joint venture involving independent tower companies in the country.
PTCI Holdings Pte. Ltd. (PTCI), Connect Infrastructure (Philippines) Pte. Limited (CIP), and Meralco Industrial Engineering Services Corporation (MIESCOR) notified the PCC on February 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 owns Phil-Tower Consortium, Inc. (Phil-Tower PH), an independent tower company, through PTCI Assets Holdings. Inc. (PAHI), their domestic holding company. CIP and MIESCOR jointly control MIESCOR Infrastructure Development Corp. (MIDC), another independent tower company. The proposed transaction will grant Pylon full ownership of both Phil-Tower PH and MIDC.
In their notification to the PCC, the parties emphasized the complementary nature of Phil-Tower PH and MIDC’s businesses. By combining their geographic footprints and diverse capabilities, the new entity would be able to offer mobile network operators a broader network coverage of towers.
On May 4, the Commission directed the PCC Mergers and Acquisitions Office (MAO) to open a Phase 2 review of the transaction due to limited information to fully assess the impact on competition after the Phase 1 review.
Phase 2 review will entail:
• Validating the nationwide distribution of passive towers, which are physical structures that support equipment for wireless communication of mobile network operators that lease space thereon;
• Examining the monitoring processes of regulatory agencies;
• Examining the duration and terms of the long-term contracts between independent tower companies and mobile network operators;
• Assessing the timeliness, sufficiency, and likelihood of entry and expansion of competitors into the market for tower leasing; and
• Verifying whether the transaction will result in conglomerate effects.
The Philippine Competition Act of 2015 empowers the PCC to scrutinize mergers and acquisitions. This ensures that such deals do not substantially lessen competition in the relevant markets and harm consumer welfare.
