The hotly-awaited merger of Telstra and San Miguel Corp. is facing another setback. A network rival from the Philippines has announced on Tuesday that legal charges will be filed against SMC. Telstra has yet to comment on this latest development.
Philippine Long Distance Telephone Company (PLDT), the Philippines’ largest internet and phone provider, is planning to file legal charges against SMC for withholding the 700MHz spectrum. The Sydney Morning Herald has reported that both PLDT and Globe Telecom are in talks with the local regulator to "force” SMC to share their top asset.
Although possible, analysts say that the distribution would bring a strong and negative impact to the expected profitability of the new ventures.
In an interview with Fairfax Media, PLDT head of Regulatory Affairs Ray Espinosa said that the company is in the process of launching legal charges against San Miguel and other parties involved should they still refuse to share the spectrum.
"The 700MHz as it is assigned today has been issued with the assumption that it will be used for broadcast purposes only [and] the companies that hold it cannot legally use it for mobile communications purposes," he said.
"We are prepared to take vigorous action judicially if that's necessary for us to get our fair share of the frequency ... and that could mean bringing the case before our judicial courts. That would be against the regulators and the holders of the frequency.”
Espinosa also commented that they will also begin to lobby President Benigno Aquino III this month until early January.
This ongoing legal discussion between SMC and PLDT isn’t the only factor being considered for the venture’s looming failure. According to Creator Tech Principal Steve Mackay, the upcoming national elections slated to unfold in May 2016 is also another issue both San Miguel and Telstra should watch out for.
"Telstra could be facing a whole new set of case law and government regulations covering telecommunications in the country after the court case and the national election," Mackay commented in a report from Rappler.
San Miguel Corporation and Telstra’s venture has been confirmed last August, receiving positive comments from Filipino subscribers online. Four months later, there are still no new updates about what’s in-store on this most-buzzed partnership of the year. Details on SMC and Telstra’s timeline have been shared by Wavetablet.
The legal charges that await SMC will definitely yield a negative impact on its ongoing negotiation with Telstra. Although no word yet from San Miguel boss Ramon Ang, this controversy is only expected to intensify in the coming weeks.
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