Press Release
March 1, 2017


Sen. Grace Poe today endorsed to the plenary a measure extending the legislative franchise of Smart Telecommunications Inc. for another 25 years, even as she sought for further improvements in the quality of service to millions of subscribers.

Poe, chairperson of the Senate public services committee, recommended the approval of House Bill No. 4637, taking into consideration Senate Bill No. 1302. The committee report signed by 15 senators introduced amendments to Republic Act (RA) 7294 which originally granted Smart a 25-year legislative franchise in 1992. The senator said how she wished her committee could include service guarantees, performance benchmarks, improvement pledges, impose penalties for "lousy service," prohibit dropped calls, slow Internet, false advertising, punish overbilling, reinstate vanishing loads, and sanction weak signals in the franchise renewal of Smart, which has around 56 million subscribers.

"But unfortunately these do not fall within the ambit of a legislative franchise. It is a function of regulation," she lamented, but assured these issues will be tackled in separate hearings.

Among the key provisions of the Senate-endorsed measure include the prerequisite for Smart to make a public offering, retaining the original wording in its original franchise that mandated 30 percent of its authorized capital stock must be listed through the stock exchange which the House deleted. The House version also effectively exempted Smart, the wholly owned mobile unit of listed PLDT, Inc., from the initial public offering requirement by adding the phrase "unless the grantee is wholly owned by a publicly listed company," but the Senate deleted the phrase to comply with the original mandate under RA 7294.

"We have retained the original wording in RA 7294 which mandates the public listing of Smart's shares of stock. During the hearings, we have emphatically conveyed to the Securities and Exchange Commission the sense of the Senate that it must enforce this provision of the law and that any failure on the part of the grantee to comply must be penalized," said Poe.

The Senate committee inserted a new provision mandating that Smart "shall give priority to improving and extending its services in areas not yet served, and in hazard- and typhoon-prone areas that shall be determined by the National Disaster Risk Reduction and Management Council in coordination with the National Telecommunications Commission."

Additionally, Smart was also tasked "to improve and upgrade its equipment, facilities and services in order to ensure effective compliance with the objectives of RA 10639 or the Free Mobile Disaster Alerts Act" which compels mobile service providers to send out free text alerts in the event of any impending natural disaster and prescribes penalties for non-compliance.

The Senate body also deleted the term "co-use," which regulators and Smart officials discussed during the hearings as an existing practice in which rival telco firms share facilities and each other's frequencies, as Poe said this "cannot be invoked in employing anti-competition practices."

Congress has only two weeks or until March 15 to extend the mobile telecommunications giant's legislative franchise which will expire later this month.

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