The Philippine Competition Commission (PCC) said it has begun a Phase 2 review of a proposed joint venture involving independent tower companies in the country to fully assess the impact on competition after the Phase 1 review.
In a statement on Tuesday, June 11, the anti-trust body said that the Phase 2 review entails a more in-depth assessment of the proposal by PTCI Holdings Pte. Ltd. (PTCI), Connect Infrastructure (Philippines) Pte. Limited (CIP), and Meralco Industrial Engineering Services Corporation (MIESCOR) to form a joint venture through the acquisition of shares in a newly established company named Pylon Holdings, Corp. (Pylon).
Phase 2 review will focus on five aspects of the proposed JV. First, PCC said it will validate the nationwide distribution of passive towers, which are physical structures that support equipment for wireless communication of mobile network operators that lease space thereon.
Second, it will examine the monitoring processes of regulatory agencies, and third, examine the duration and terms of the long-term contracts between independent tower companies and mobile network operators.
Fourth, the Phase 2 review will assess the timeliness, sufficiency, and likelihood of entry and expansion of competitors into the market for tower leasing.
Lastly, PCC will verify whether the transaction will result in conglomerate effects.
On May 4, PCC said that the “Commission directed the PCC Mergers and Acquisitions Office (MAO) 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.”
It could be recalled that PTCI, CIP, and MIESCOR notified the PCC on February 21 of their proposed transaction to form a joint venture through the acquisition of shares in a newly established company named Pylon.
PTCI owns 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 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 Philippine Competition Act of 2015 empowers the PCC to scrutinize mergers and acquisitions. This ensures that such deals do not substantially lessen competition in the relevant markets and harm consumer welfare.