Keeping telecom giants in line

Kudos to the National Telecommunications Commission for showing to the public that it has spunk after having decided in favor of the consumer in the current pricing war among telecommunication firms. The price war that erupted in the telecom sector during the first half of the year – and spilled over to the second semester – is probably the best thing that has happened to Filipinos addicted to "texting" and the use of cellular phones.

The NTC position was a pleasant surprise to consumers who had to endure the onslaught of continuing oil price hikes, a new round of fare adjustment, and non-stop increases in the price of food and all other basic goods.

Amid seemingly never-ending price hikes, only telecom firms and their related services have managed to bring down prices. We have the unlimited service price war to thank for, one that was sparked by a small, third player like Sun Cellular and fortunately upheld by the NTC.

Sun Cellular, the brand name of Digitel Mobile Philippines Inc., started it all in October last year when it launched the within-network call-and-text-all-you-can promo called 24/7. The firm’s subscriber base immediately doubled within a few months from 700,000 in end-September 2004. Fearing that the switch to Sun would snowball, industry giants Smart and Globe immediately jumped on the NTC to stop the "destructive competitive move" but at the same time launched similar reduced-price packages to counter Sun Cellular’s 24/7. All these brought joy to the consumers.

Withstanding Pressures

Standing tall through all these innovative price deals, initiated by Sun Cellular and adopted later on by its competitors, is the National Telecommunications Commission for allowing unlimited pricing to run its course despite resounding objections from the big players, Smart and Globe.

That the Commission was under severe pressure to stop the bucket offerings was obvious with the way press releases and privilege speeches in Congress had been churned. The giants also publicly asked for NTC to end Sun Cellular’s 24/7 promo because they claimed the promo was not good for consumers.

Globe and Smart even had Sun Cellular’s grade of service tested and arrogantly declared to have immensely failed a 2002 NTC order calling for a level of service that would connect 93 out of 100 calls on the first attempt and would not prematurely drop 95 out of 100 calls.

Sun Cellular, according to the giants, connected less than four out of every 10 calls on the first try. Drop calls are practically 100 percent since Sun Cellular deliberately disconnect calls every five minutes, they said.

Happily, the two giants’ extreme posturing failed to rouse consumers to their side. Subscribers have been telling the majors to leave poor Sun Cellular alone and let consumers decide the quality of service they are willing to pay for.

The NTC eventually issued an order allowing Sun Cellular and all other innovative promos to stay. Thus, squelching the petition of Smart and Globe for the NTC to kill the "24/7 service package pricing".

Flexible Special Deals Standards

The Commission effectively lifted its 2002 circular on grade of service but only for innovative price deals. Regular pricing, according to the NTC, would still have to comply with the old policy.

Bucket pricing and other "special rates" offers may have their own standards but must be disclosed to consumers through print and other media ads.

After a year, the standard must have improved by at least 50 percent. In two years, the level of service will revert back to the 2002 circular, which require that 93 out of 100 calls must be connected on the first attempt and would not prematurely drop 95 out of 100 calls, according to the NTC.

Keeping The Giants In-Line

Despite the various reduced-price packages now made available to subscribers, the phone giants have managed to stay profitable. PLDT, for instance, is actually recording new highs each quarter, leading to a profit outlook of P29 to P30 billion this year.

This only shows that companies in monopolistic positions will not voluntarily give up even a portion of their excessive profits unless forced to do so. This time, it was competitive pricing supported by a regulator that managed to withstand the influential pressures of the affected firms.

A new challenge is facing NTC as the telecom giants are again flexing their muscles to influence government policy on the use of Voice over Internet Protocol (VoIP) facility.

Should the NTC rule that VoIP is a value-added service instead of a value-added network service, there will be more service providers that can sell the service in the country. This simply translates to a competitive market where Filipinos may be able to benefit from lower – as much as 50 percent cheaper – long distance telephony rates using broadband lines.

Will NTC be able to withstand another round of pressure and keep in line the profit appetite of giant telecoms for the benefit of the consumers?

Sustaining The Rotary Spirit

The Philippines has the distinction of being the first country in Asia to organize a Rotary club dedicated to the service of its community. The historic commitment made by Rotary to immunize all of the world’s children against polio was launched right here in our country with Filipino Rotarians at the helm.

The Rotary Community Corps, a form of grassroots self-help service program to improve the quality of life in villages, was also successfully launched and effectively implemented here in the Philippines, being one of the few countries that fully optimized the benefits of this unique Rotary program. These are proud achievements of Filipino Rotarians as they practice "service above self."

Many Rotarians eventually became politicians in their respective localities. And sad to say, many turned out to be ineffective and dysfunctional political personalities. What changed them? What is it in the political arena that changes their values? Why is it that after being elected to a position of power, they suddenly abandon "service above self" and embrace instead "service of oneself first"?

I leave you with these questions with a fervent hope that someone, whether a Rotarian or not, somewhere out there will provide the "sparks of inspiration" that will light our way out of the economic and social quagmire we are in today.

Join us in "BREAKING BARRIERS" on Wednesday, 24th August 2005, IBC-TV13 (11 p.m.) and gain insights into the views of William "Bill" Boyd, incoming President of Rotary International, on issues and programs related to Rotary clubs‚ involvement in community service locally and worldwide. Watch it.

Non-Wager Poker Tournament

The Poker Club of the Philippines is informing poker enthusiasts that a few slots are still open for the 3rd leg of the Poker King Challenge, a series of non-wager poker tournaments conducted under the auspices of Pagcor, the country’s gaming authority.

The leg competition is scheduled on the 27th of August, to be held at Century Resort Hotel, Balibago, Angeles City, Pampanga. You may call the secretariat (c/o Cindy at 817-9092) or visit www.PokerClubofthePhilippines.com for details.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. If you wish to view the previous columns, you may visit my website at http://bizlinks.linkedge.biz.