PCC begins Phase 2 review on telco tower firms’ joint venture

MANILA – The Philippine Competition Commission (PCC) on Tuesday said it expanded its review of the proposed joint venture of tower companies in the country to further assess if the transaction will have an anti-competitive impact in the local market.
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The transaction involves the acquisition of shares of Pylon Holdings Corp. by Phil-Tower Consortium Inc. (Phil-Tower PH) and MIESCOR Infrastructure Development Corp. (MIDC).

Phil-Tower PH is an independent tower company owned by Singapore-based PTCI Holdings Pte Ltd. through its domestic holding firm PTCI Assets Holdings Inc. (PAHI).

On the other hand, MIDC is jointly controlled by Connect Infrastructure (Philippines) Pte Ltd. (CIP) and Meralco Industrial Engineering Services Corporation (MIESCOR).

In a statement, PCC said it ordered its Mergers and Acquisitions Office (MAO) to expand the review to the second phase due to the limited information of the first phase of the review to fully assess the impact on competition of the merger and acquisition.

The PCC was notified by PTCI, CIP, and MIESCOR about the transaction last Feb. 21.

“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,” the PCC said.

It said the Phase 2 review aims to validate the nationwide distribution of passive towers, or the physical structures that support equipment for wireless communication of mobile network operators that are leasing space.

The expanded assessment also targets to examine the monitoring processes of regulatory agencies and the duration and terms of the long-term contracts between independent tower companies and mobile network operators.

The study will also assess the timeliness, sufficiency, and likelihood of entry and expansion of competitors into the market for tower leasing as well as verifying whether the transaction will result in conglomerate effects.

Under the Philippine Competition Act of 2015, the PCC has given the power to scrutinize merger and acquisition transactions to ensure that such deals do not substantially lessen competition in the relevant markets and harm consumer welfare.

Any merger and acquisition deals exceeding PHP7.8 billion in terms of size of party (SoP) and PHP3.2 billion for the size of transaction (SoT) before proceeding with the deal.

The higher thresholds for SoP and SoT started last March 1.

Both thresholds should be met to trigger the compulsory notification to PCC for a merger or acquisition transaction. (PNA)