MANILA, Philippines – President Rodrigo Duterte renewed the franchise given to Smart Communications, giving it another 25 years to operate.

Last April 21, he signed into law Republic Act No 10926, extending the franchise given to Smart in 1992. Smart’s franchise was set to expire last March.

The new law’s tax provisions exempt Smart from paying Customs duties, tariffs, and taxes for radio telecommunications equipment, electronic communications equipment, machinery, and spare parts needed for its line of business.

Section 7 of the recently signed law also exempts Smart from the previous requirement of making an initial public offering of at least 30% of their authorized capital stock within two years from implementation of the law.

This provision in the law excludes companies which are “wholly owned by a public listed company.”

In effect, Smart – which is a wholly-owned subsidiary of listed PLDT – is exempted from the public offering requirement.

A section under RA 10926 introduces an “Equality Clause” that states that “any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or which may hereafter be granted upon prior review and approval of Congress, shall become part of this franchise and shall be accorded immediately and unconditionally to the herein grantee.”

There is also a new Penalty Clause which imposes a fine of P1 million for every working day that Smart fails to submit its annual report to Congress. This clause will take effect once the same clause is applicable to other telecommunications franchise grantees.

In the meantime, the fine to be imposed is P500 per working day of non-compliance.

Modified sections of the law order Smart to ensure its stations do not make “obscene or indecent” transmissions, spread false information, or “assist in subversive or treasonable acts.”

It also called on the company to improve and extend its services “in areas not yet served, and in hazard- and typhoon-prone areas” as determined by the National Disaster Risk Reduction and Management Council.

The renewal of Smart’s franchise appeared to be in trouble last year, when the previous 16th Congress adjourned in June 2016 without approving Smart’s franchise. Some senators had raised issues like slow internet service and dropped calls. – Rappler.com