A proposed law that would grant a 25-year extension to Smart Communications’ congressional franchise, now awaits the approval of President Rodrigo Duterte, the Inquirer has learned.
Members of a congressional bicameral conference committee recently approved an extension of Smart’s contract, which was first granted in 1992 and set to expire this month.
Ray Espinosa, chief corporate services officer of Smart’s owner PLDT Inc., earlier said the failure to extend the franchise could prompt the group to go into “general default” on existing loans.
Espinosa, however, downplayed any service disruptions as a result of the expiration of the franchise.
PLDT held other franchises, which would allow the group to continue operations of mobile services that covered about half of the country’s population.
Exemption
The bill was passed by the House of Representatives in January this year, and was subsequently amended by the Senate earlier this month.
The amendments were then accepted by the Lower House last March 14, 2017.
The Senate version, as with the House of Representatives, allowed an exemption to the requirement for Smart to sell at least 30 percent of its shares to the public via an initial public offering within two years.
The exemption was allowed because Smart is wholly owned by a publicly traded company, in this case, PLDT.
As lawmakers earlier insisted on a public listing, PLDT officials argued that Smart had effectively complied with the spirit of the law.
They said that an IPO could hurt the value of PLDT.
Smart would likewise be compelled to build telecommunications facilities, specifically in calamity-prone areas, to aid the population in times of disaster.
Another amendment was the deletion of the term “co-use” in the franchise. Lawmakers said this would prevent the term from being used in anticompetitive practices.