Inspite of their being fierce rivals, the competition between telecommunications leader Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom has been relatively friendly.
But not anymore.
For weeks now, executives of the two telco giants have been exchanging harsh words in relation to the recent acquisition by PLDT of a majority stake in Gokongwei-owned Digitel.
Take it from no less than Senate President Juan Ponce Enrile: The P74.1 billion PDLT-Digitel deal is legit, and there’s no need for government to investigate it as no law was violated.
It appears that the June 30, 2011 deadline set for the closing of the transaction may not be met, given that even Congress has taken an interest in the P74.1-billion megadeal.
According to Senator Juan Ponce Enrile, the PLDT group does not need to secure congressional approval for the purchase of the Gokongwei group shares in Digitel since the Gokongweis were selling their shares in Digitel, not the latter’s franchise.
But that’s another issue.
The bone of contention really is Globe’s claim that PLDT’s acquisition of Digitel, and the resulting increased market share of PLDT, will throw back the telecommunications industry to the monopoly days.
The acquisition will result in PLDT having a 70 percent share of the mobile telephony market, and Globe, 30 percent. And according to Globe, the resulting cellular frequency ratio will be 1:3.5 in favor of PLDT.
PLDT chairman Manuel Pangilinan however downplayed fears that a PLDT-Digitel merger would hinder competition in the local telecommunications industry, saying they intend to keep Digitel as a separate company and that they will maintain the unlimited and bucket-priced services of Sun Cellular.
PLDT regulatory affairs and policy head Ray Espinosa claims that Globe is resorting to “regulatory blackmail” and wants to use the National Telecommunications Commission to deliver concessions to Globe “on a silver platter.”
He also accused Globe’s controlling shareholder - the Ayala group - of institutionalizing combinations in restraint of trade since telcos other than Globe are not allowed to offer telephony and DSL services in Ayala property developments.
PLDT spokesperson Ramon Isberto earlier said that Globe is just sour-graping, since it lost in the bid to acquire Digitel.
James Sullivan, head of Asia Telecom Research at JP Morgan Singapore, has an interesting take on the PLDT-Digitel deal. He says he does not see Globe at the losing end of the deal.
He notes that Globe even stands to benefit from less competition. “Globe is put in an interesting position. On one hand, the industry structure has become far more stable which is positive for industry participants. One can argue this is positive for Globe because they get the benefits of an improved industry structure without having to pay the price,” Sullivan noted.
It seems that Malacañang has already ordered a probe of the PLDT-Digitel deal to ensure a “level playing field” in the local telecoms market. But it really shouldn’t make a mountain out of a molehill, as competition is likely to be still robust in the years ahead.
Whether or not the NTC and other regulatory bodies will rule in favor of PLDT or Globe on the “monopoly/combinations in restraint of trade” accusations remains to be seen.
Let’s face it. Our so-called anti-monopoly provision in the Constitution and the penal code have no teeth. Whether this will work for or against PLDT is something that government regulators and Congress have to look into.
The bottomline, however, is whether or not the PLDT-Digitel will be for the benefit of the consumers. PLDT says yes. Globe says no. Let our regulators decide.
Disturbing reports
Is politics being used to influence the outcome of the murder case of radio broadcaster and environmentalist Gerry Ortega?
And corollary to that, is this murder case being used to influence the political landscape in a province known to be a model of sound local governance?
Former Palawan governor Joel Reyes, who has been implicated in the killing of Ortega last January 24, has made very serious accusations about the alleged extraordinary interest in the case of his staunch political rivals, namely Jose “Pepito” Alvarez and Puerto Princesa City Mayor Edward Hagedorn, who are allies.
Reyes said he had helped Abraham Mitra defeat Alvarez in the 2010 elections, while he himself defeated Hagedorn in the elections for governor in 2001. In the 2004 gubernatorial elections, which he won again, Reyes also faced former Palawan congressman Vicente Sandoval and Gerry Ortega himself.
A certain witness, Percival Lecias, in his affidavit, claims that on February 28, Hagedorn and Alvarez went to him at the NBI Anti-Terrorism Division Office in Manila, after which Hagedorn gave him P6,000 which telling him: “Dito ka na kumampi sa katotohanan (Side with the truth here).”
He also said a companion of Hagedorn and Alvarez left two big silver attaché cases at the Anti-Terrorism Division Office while NBI head agent Rosauro Bautista was inside. He said another NBI agent whose name he did not know picked up the attaché cases and brought it inside the room where Hagedorn, Alvarez and four suspects where.
Later, Lecias was brought into the same room. The four were asked if they knew Lecias and vice-versa, and in both, they said no.
Lecias adds that he later saw the people at the Anti-Terrorism Division Office dividing the money from the two attaché cases. After the incident, Lecias said he left with two NBI agents and they went back to the NBI dormitory.
It’s about time that the Department of Justice look into these disturbing reports. If money can be used to influence the outcome of NBI investigations, then poor people never stand a chance of getting justice.
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