This refers to Den Somera’s June 7 Market Rider column (“The problem with the SMC telco deal,” Business).
Somera wrote: “Based on disclosures to the bourse last Tuesday, half of the deal was paid the previous day—a significant event questioned by some market watchers since it was not disclosed immediately. The neglect of which, following disclosure procedures, constitutes a violation against the investing public’s right for fair and timely information.”
Globe wishes to clarify that the disclosure with regard to its purchase of 50 percent of San Miguel Corp.’s telco businesses was sent to the Philippine Stock Exchange and the Securities and Exchange Commission within the first hour of Monday, May 30, 2016—that is at 8:15 a.m., at least one hour earlier before the bourse opened. This was done to give the PSE and SEC enough time to digest the disclosure about the transaction and institute measures it may deem proper given the nature of the transaction.
The PSE ordered a trading halt on Globe Telecom (PSE:GLO) shares immediately at 9 a.m., which was lifted at 10 a.m. of the same day. A trading suspension followed at 1:30 p.m.; this was only lifted the following day, Tuesday, May 31, 2016, at 10 a.m.
As a publicly listed company, we are guided by the principles of good corporate governance. Thus, we abide by the existing PSE and SEC disclosure procedures, giving due respect to the regulators, our shareholders and the investing public.
In the same column, Somera talked about the industry situation where he wrote: “Yet, since the industry’s deregulation in 1992, internet service has not adjusted in terms of quality—exposing the weakness of the duopoly. Adding insult to injury, the recent deal seemed to have no outright guarantee of a fast, reliable and affordable service except it would definitely reinforce the two companies’ grip on the market, and most significantly, make it hard for a third player to compete.”
This opinion is so biased that it begs us to recall the state of our telecommunications industry during the pre-Ramos days, when the Filipino consumer would wait for years to get a land line, share a land line with a party line; or could access the internet only in offices or internet cafés.
With the deregulation of the industry, the Filipino consumer has been empowered to use mobile phones with technologies, starting from GSM all the way to 4G/LTE, that we are using today. These new technologies spearheaded the growth of smartphone usage among Filipino consumers who now have mobile internet at their fingertips, enjoying their digital lifestyle, making us among the top 10 users of Facebook and the “Selfie Capital of the World.” All these happened despite the fact that the Philippines for many years only had a handful of telco players, which arguably today are down to two.
As to the decision of SMC to sell its telco businesses to the existing telco players, this was solely a company decision made for reasons only it knows. Had it decided otherwise and stayed on to compete in the industry, the response would have been the same because as true players, we compete in a business environment. We compete in terms of service and customer preference. We compete to sustain our business and keep our “Circle of Happiness spinning with happy employees, happy customers and happy shareholders.”
—YOLY C. CRISANTO, SVP, corporate communications, Globe Telecom