Question & AnswerQ&A (Republic Act No. 10926)
Republic Act No. 10926 extends for twenty-five (25) years the franchise granted to Smart Communications, Inc., allowing it to provide telecommunications and electronic communications services throughout the Philippines and internationally.
The franchise grants Smart Communications the right to construct, establish, install, maintain, lease, purchase, and operate telecommunications infrastructure such as transmitting and receiving stations, satellites, lines, systems, networks, international gateways, local exchanges, and platforms.
An electronic communications network is defined as (a) a transmission system conveying signals by electrical, magnetic, or electromagnetic energy; and (b) apparatus, switching and routing equipment, software, and stored data used in association with such system for signal conveyance.
It includes services consisting mainly in the conveyance of signals via an electronic communications network, covering wired, wireless, fixed, cellular, mobile, integrated telecommunications/computer/electronic services, value-added services, and future technical advances.
The grantee must conform to honest enterprise ethics, avoid obscene or indecent transmissions, prevent dissemination of false information or misrepresentation, assist neither in subversive nor treasonable acts, and improve and extend services particularly in hazard- and typhoon-prone areas determined by relevant authorities.
The franchise is extended for a period of twenty-five (25) years from the Act's effectivity date, and if the franchisee ceases operations for two consecutive years, the franchise is deemed revoked.
The grantee must give written acceptance to Congress through the relevant committees within sixty (60) days from the Act's effectivity, after which the privileges granted may be exercised. Failure to accept renders the franchise void.
The grantee pays taxes on real estate, buildings, and personal property like other persons, except radio telecommunications and electronic communications equipment which are exempt from customs duties and taxes. It pays VAT on gross receipts related to the franchise and remains liable for income taxes.
No, the franchise may not be sold, leased, transferred, granted usufruct, or assigned, nor can controlling interest be transferred, without prior approval of the Congress of the Philippines.
The grantee must list at least thirty percent (30%) of its authorized capital stock in a Philippine securities exchange within two years from the Act's effectivity unless it is wholly owned by a publicly listed company meeting this threshold.
The grantee must comply with applicable labor laws and standards promulgated by the Department of Labor and Employment, considering the telecommunications industry's peculiarities.
The grantee must provide Mobile Number Portability to all subscribers, establish mechanisms to implement it, interconnect with other telecommunications facilities, and avoid installing network features that impede MNP implementation.
Any advantages, privileges, exemptions, or immunities granted under other telecommunications franchises shall also apply to the grantee immediately and unconditionally, except for provisions regarding franchise territory, lifespan, or type of service authorized.
A fine of one million pesos (P1,000,000) per working day of noncompliance, effective upon applicability with other telecommunications franchise grantees; in the interim, a fine of five hundred pesos (P500) per working day applies.
This Act takes effect fifteen (15) days after its publication in the Official Gazette or a newspaper of general circulation.