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GMA Network opposes SkyCable-Home Cable full consolidation

From BusinessWorld Broadcast giant GMA Network, Inc. has opposed the issuance of the regulator's approval for the full integration of Central CATV, Inc. (SkyCable) and Philippine Home Cable Holdings, Inc. Respective operations of the two cable compan...

Apr 23
 

GMA Network opposes SkyCable-Home Cable full consolidation

Column: Business
Author: GMANews.TV

From BusinessWorld

Broadcast giant GMA Network, Inc. has opposed the issuance of the regulator's approval for the full integration of Central CATV, Inc. (SkyCable) and Philippine Home Cable Holdings, Inc.

Respective operations of the two cable companies have been merged since 2001, consolidated under holding firm Beyond Cable Holdings, Inc.

Beyond is now 66.5% owned by Lopez-led Benpres Holdings Corp. and 33.5% owned by MediaQuest Holdings, Inc., the media investment arm of Philippine Long Distance Telephone Co. (PLDT).

Prior to the merger, Media-Quest controlled a majority stake in Home Cable while SkyCable was a wholly owned subsidiary of Benpres.

Benpres is the holdings firm of the Lopezes which also owns ABS-CBN Broadcasting Corp., a fierce rival of GMA Network which operates free channel GMA-7.

GMA Network's latest complaint dated Sept. 22 is seeking to thwart the move to finalize and complete the consolidation of the stake of the Lopez Group and PLDT Group in Beyond Cable.

This latest complaint is a reiteration of separate complaints filed in 2003 and now pending with the Court of Appeals and the National Telecommunications Commission (NTC).

Part of their plan is to update their consolidation agreement so that the new agreement would address "regulatory and personnel issues."

GMA Network said the 2001 merger, including the subsequent execution of the deed of assignment and exchange of assets for shares of stock on April 2004, happened without the necessary approval from the NTC.

"It is the statutory duty of NTC to act upon such merger and the monopolistic activities of the petitioners and to declare unlawful and therefore null and void the mergers and consolidation sought by the petitioners," its petition read.

Home Cable transferred some P2.268 billion in total assets and P2.10 billion in liabilities to Sky-Cable. In return, SkyCable approved an increase in authorized capital stock of 14.059 million for Home Cable at a subscription price of P11.53 in shares.

GMA Network said the move violates the Public Service Act or RA 7969 which regulates broadcast franchise and license; the Constitution which restricts monopoly in mass media; Executive Order No. 205 which regulates the operation of cable antenna television (CATV); and NTC Memorandum Circular No. 4-8-88 which limits monopoly and infringement on the free television and broadcast industry.

"Unless immediately suspended by the NTC, the merger between the petitioners will indubitably create a monopoly detrimental to the general public as well as smaller cable TV operators," GMA Network said.

The Lopez Group and Media-Quest declined to comment on this story.

David S. Lim, Solid Group, Inc. president and chief executive, said the company will be "interested to see the developments in the case."

Solid Group owns 100% stake in myDestiny, a competitor, which offers both broadband Internet access and cable channels.

Earlier, SkyCable had said the merger cannot result in a monopoly as there is "an estimated 800" cable television operators in the country, including the merged operations of Destiny Cable and Global Cable, and Cablelink Systems in Metro Manila.

Citing a survey conducted in June 2002, GMA Network said the combined market share SkyCable, Home Cable and their affiliates already cornered 71% of the total cable TV market in Mega Manila comprised of Metro Manila, Bulacan, Laguna, Rizal and Cavite. - BusinessWorld

Source: GMANews