Question & AnswerQ&A (Republic Act No. 10926)
The franchise granted to Smart Communications, Inc. is extended for twenty-five (25) years from the effectivity of Republic Act No. 10926.
Smart Communications, Inc. is authorized to construct, establish, install, maintain, lease, purchase, operate and carry on the business of providing telecommunications or electronic communications services throughout the Philippines and between the Philippines and other countries and territories, including outer space.
'Electronic communications network' means a transmission system for conveyance by use of electrical, magnetic or electro-magnetic energy of signals of any description and includes apparatus comprised in or used for switching and routing of the signals, along with software and stored data.
Smart Communications, Inc. must conform to the ethics of honest enterprise, must not use its stations for obscene or indecent transmissions, dissemination of deliberately false information, willful misrepresentation, or assist in subversive or treasonable acts.
The franchise shall be deemed ipso facto revoked if Smart Communications, Inc. fails to operate continuously for two (2) years.
The grantee shall pay the same taxes on real estate, buildings and personal property as others, except that radio telecommunications and electronic communications equipment, machinery and spare parts are exempt from customs duties and other taxes. The grantee shall also pay value-added tax on all gross receipts in lieu of other local taxes, but remains liable for income taxes under the National Internal Revenue Code.
No. The grantee is prohibited from selling, leasing, transferring, granting usufruct, assigning the franchise or transferring controlling interest without prior approval from Congress.
The grantee must list at least thirty percent (30%) of its authorized capital stock in any securities exchange in the Philippines within two years from the effectivity of the Act, unless it is wholly owned by a publicly listed company meeting the same public ownership requirement.
The grantee must comply with applicable labor standards under existing labor laws, rules, and regulations, considering the nature and peculiarities of the telecommunications industry.
The grantee shall provide Mobile Number Portability to all its subscribers, establish a mechanism for its implementation, interconnect with other telecommunications infrastructures, and not install any network features that impede nationwide MNP.
Failure to submit the requisite annual report shall be penalized with a fine of one million pesos (₱1,000,000.00) per working day upon applicability with other franchisees, and until then, a fine of five hundred pesos (₱500.00) per working day, collected by the National Telecommunications Commission (NTC) and remitted to the National Treasury.
Any advantage, favor, privilege, exemption, or immunity granted under existing or future franchises shall be immediately and unconditionally accorded to the grantee, except for provisions concerning territory, franchise lifespan, or type of service authorized.
The acceptance of the franchise must be given in writing to Congress within sixty (60) days from the effectivity of the Act. Failure or refusal to accept within this period renders the franchise void.