Smart Communications franchise extended until 2042

PRESIDENT Rodrigo R. Duterte has signed into law the extension of Smart Telecommunications, Inc.’s franchise by another 25 years.

In a disclosure to the stock exchange on Wednesday, PLDT, Inc. said Mr. Duterte on April 21 signed Republic Act (RA) No. 10926, which renews Smart’s franchise until 2042.

“PLDT was formally notified today of the approval of the law by the Office of the President,” the listed telecommunications giant said.

The franchise extension will take effect 15 days after its publication in a newspaper of general circulation.

Smart’s original legislative franchise had expired on March 27.

PLDT’s wireless unit is no longer required to conduct an initial public offering (IPO) under the new franchise law. The original franchise had required Smart to make a public offering of shares representing at least 30% of its authorized capital stock within two years of the law’s effectivity.

Under RA 10926, the provision on listing of shares was amended to include the phrase “unless the grantee is wholly owned by a publicly listed company with at least 30% of whose authorized capital stock is publicly owned.”

PLDT has maintained there is no need for a Smart IPO, saying “the listing obligation has been complied with when PLDT, a listed company with a public float of over 50%, acquired 100% of Smart Communications in March 2000.”

An equality clause was also introduced in Smart’s franchise, allowing the company to enjoy future incentives that will be granted to existing and new players.

“Any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or which may hereafter be granted under prior review and approval of Congress, shall become part of this franchise and shall be accorded immediately and unconditionally to the herein grantee: Provided, that the foregoing shall neither apply to nor affect provisions of telecommunications franchises concerning territory covered by the franchise, the life span of the franchise or the type of service authorized by the franchise,” the law stated.

The law also obliges Smart to provide mobile number portability (MNP) to all its subscribers.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. —