ASEAN KEY DESTINATIONS
2011 NTC ruling says PLDT entitled to compensation for CURE investment
While PLDT Inc. has waived its rights to a “cost recovery” provision in agreeing to surrender the spectrum frequencies assigned to Connectivity Unlimited Resources Enterprise (CURE), earlier agreements with the government indicated that such payment should be made.
According to the National Telecommunications Commission (NTC) Case No 2011-072, PLDT was supposed to be paid for the its investment in CURE.
“The PLDT Group, as a minimum, shall be entitled to fully recover the reasonable costs of its investment in CURE (the ‘Cost Recovery Amount’),” the 2011 decision read.
The NTC said Smart Communications Inc.—a wholly-owned subsidiary of PLDT—was to divest from CURE so the parent company may be allowed to merge with Digital Telecommunications Philippines Inc. (Digitel), the owner and operator of Sun Cellular.
Under the agreement, the NTC said it will supervise and control the divestment from CURE, which would, in turn, be acquired by Smart.
“The Divestment Sale will be made under the supervision and control of the Commission and will be effected through competitive bidding among duly enfranchised and qualified public telecommunications entities,” the NTC decision read.
This meant that Smart would acquire CURE—which then carried the Red Mobile brand—but the latter’s frequencies would be auctioned off.
“The Terms of Reference for the competitive bidding shall be formulated by and subject to the discretion of the Commission in accordance with the herein Divestment Plan,” the decision read.
At that time, CURE was assigned 10 megahertz (MHz) of the 3G frequency under the 2100 band.
Under the decision, Smart should be compensated for the frequencies so it can recover its investment in CURE.
The order was signed by NTC Commissioner Gamaliel Cordoba, Deputy Commissioner Carlo Jose Martinez, and Deputy Commissioner Delilah Deles on Oct. 26, 2011.
On Tuesday, however, President Rodrigo Duterte said he did not want the government to buy back the frequencies from CURE which were given to the company for free.
“The President was particularly displeased with the fact that in order to have a third telecoms player we would need to find frequencies to be allotted to the third telecom player, and he was displeased with the fact that frequency given to a shell company, CURE, which apparently was given for free would have to be bought back by government in order that the third player could be given these frequencies,” Presidential Spokesperson Harry Roque said.
Duterte also said he could send tax auditors to scrutinize the finances of telecommunications companies.
On Wednesday, Department of Information and Communications Technology (DICT) officer-in-charge Eliseo Rio said PLDT chairman, president, and CEO Manuel Pangilinan has agreed to waive the cost recovery amount.
“After talking to MVP yesterday, PLDT will return the CURE frequencies at absolutely no cost, that can now be awarded to the New Major Telco Player as per instruction of [President Rodrigo Duterte],” Rio said in a separate posting on his Facebook page.
Malacanang hailed this development, saying it will speed up the entry of a third player in the telecom industry.
GMA News Online has reached out to Rio and Cordoba to comment on the matter, but has received no response as of this posting.
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