THE Philippine Competition Commission (PCC) has started its in-depth assessment of the proposed joint venture of Manila Electric Co. (Meralco) unit Meralco Industrial Engineering Services Corp. (MIESCOR) with an independent tower firm.
In a statement, PCC said it has begun the second phase of review on the transaction involving PTCI Holdings Pte. Ltd., Connect Infrastructure (Philippines) Pte. Ltd. (CIP) and MIESCOR to form a joint venture through the acquisition of shares in a newly established company named Pylon Holdings Corp.
PTCI owns Phil-Tower Consortium Inc. (Phil-Tower PH), an independent tower company, through PTCI Assets Holdings. Inc., its 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.
The independent tower companies notified the PCC on February 21 of their proposed transaction and on May 4, the commission directed its 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.
In their notification, 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 Phase 2 review will entail validating the nationwide distribution of passive towers, which are physical structures that support equipment for wireless communication of mobile network operators that lease space.
It will also involve examining the monitoring processes of regulatory agencies as well as the duration and terms of the long-term contracts between independent tower companies and mobile network operators.
Likewise, it will assess the timeliness, sufficiency and likelihood of entry and expansion of competitors into the market for tower leasing, as well as verify whether the transaction will result in conglomerate effects.
In 2022, MIDC signed the deal with Globe Telecom Inc. for the acquisition of 2,180 towers for P26 billion. Phil-Tower has also acquired 1,350 towers from Globe for P20 billion.
