Philippine Competition Commission (PCC) on Tuesday said it is investigating the proposed merger between independent telecommunications tower companies.
The PCC has launched a second and more thorough review and investigation of the deal between PTCI Holdings Pte. Ltd. (PTCI), Connect Infrastructure (Philippines) Pte. Limited (CIP), and Meralco Industrial Engineering Services Corporation (MIESCOR).
These companies notified the PCC on 21 February of their proposal to form a joint venture through the acquisition of shares in Pylon Holdings, Corp. (Pylon), newly established company.
PTCI owns the 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 notifying 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 4 May this year, the Commission directed the PCC Mergers and Acquisitions Office (MAO) to open a second review of the transaction due to limited information to assess in full the impact of the initial review on competition.
The second review will validate the nationwide distribution of passive towers, which are physical structures that support equipment for the wireless communication of mobile network operators that lease space thereon and examine the monitoring processes of regulatory agencies.
The PCC will also examine the duration and terms of the long-term contracts between the independent tower companies and mobile network operators as well as assess the timeliness, sufficiency, and likelihood of entry and expansion of competitors into the market for tower leasing.
The inquiry will also verify 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 merger transactions do not substantially lessen competition in the relevant markets and harm consumer welfare.
