Home Top News JV of Meralco unit, PhilTower faces ‘more in-depth’ PCC scrutiny

JV of Meralco unit, PhilTower faces ‘more in-depth’ PCC scrutiny

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THE Philippine Competition Commission (PCC) on Tuesday said it has started a “more in-depth assessment” of a proposed joint venture (JV)  between independent tower companies Phil-Tower Consortium, Inc. (PhilTower) and Miescor Infrastructure Development Corp. (MIDC).

“On May 4, the Commission directed the PCC Mergers and Acquisitions Office 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,” the antitrust body said in a statement.

The Phase 2 review will encompass several critical areas, according to the PCC. It will validate the nationwide distribution of passive towers, essential for supporting wireless communication equipment leased by mobile network operators.

At the same time, it will examine regulatory monitoring processes and evaluate the duration and terms of contracts between independent tower companies and mobile network operators.

The review will also assess the timeliness, sufficiency, and likelihood of competitors entering the tower leasing market.

It also aims to verify whether the proposed transaction will result in conglomerate effects.

The antitrust body noted that it is empowered by The Philippine Competition Act of 2015, ensuring that such deals do not substantially lessen competition in the relevant markets and harm consumer welfare.

On Feb. 21, PTCI Holdings Pte. Ltd. (PTCI), Connect Infrastructure (Philippines) Pte. Limited (CIP), and Meralco Industrial Engineering Services Corp. (MIESCOR), a subsidiary of power company Manila Electric Co. (Meralco), formally informed the PCC of their intended partnership, the antitrust body said.

The transaction involves the establishment of a joint venture through the acquisition of shares in a newly formed entity named Pylon Holdings, Corp. (Pylon).

PTCI holds ownership of PhilTower via PTCI Assets Holdings, Inc., its domestic holding entity.

Similarly, CIP and MIESCOR jointly manage MIDC, an independent tower company registered with the Department of Information and Communications Technology that provides tower construction, site acquisition, site permitting and erection of towers, and tower management services to telecommunications companies.

The proposed arrangement aims to transfer complete ownership of both PhilTower and MIDC to Pylon.

“In their notification to the PCC, the parties emphasized the complementary nature of PhilTower and MIDC’s businesses,” the agency said.

“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,” the PCC added.

In a disclosure in February, Meralco said the partnership seeks “to meet the growing demand for 4G and 5G mobile network infrastructure across the Philippines.”

“MIDC cannot make a comment on the PCC decision at this time while Phase 2 review is still ongoing,” the tower company said in a statement on Tuesday.

“We, at MIDC, are committed to following regulatory procedures and working with the PCC to ensure a thorough review,” it added.

PhilTower was also asked to comment.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — J.I.D. Tabile

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