Globe calls on government to protect free competition in telco sector

CEBU, Philippines - Ayala-led Globe Telecom has urged the government to protect and maintain the free competition in the country’s telecommunication market ensuring a level playing field that will allow consumers to choose the best services and give providers equal opportunities to compete.

Globe made this statement in the light of “near-to-be-completed” PLDT-Digitel deal, wherein if completed and approved, PLDT will get a majority or 51 percent share of the 3G and CMTS (cellular mobile telecommunications system) frequencies, while Globe has a mere 23 percent share to service over 27 million subscribers.

National Telecommunications Commission (NTC) commissioner Gamaliel Cordoba earlier admitted that the State only has six percent (10Mhz) 3G frequency left for allocation, which is currently under litigation.

 In an official statement, Globe pointed out that the merger will result in an imbalance in market share and scarce frequency resources that will affect free competition and services to millions subscribers, among others.

Globe claimed that the PLDT-Digitel deal gives PLDT and its group virtual monopoly and control of the radio frequencies which, compared to the highways, are the modes and means of transmitting voice, data and text messages.

Likewise, Globe Telecom warned the government of spectrum applicants, speculators and consortia driven by “financial players” who eventually sell out for business gain.

Additional spectrum allocation rationally distributed to market competitors will benefit the consumers so the government should ensure there is no imbalance in this resource and it is used efficiently to bring more, better and inexpensive communication services to the public, Globe said in its statement.

Globe explained that the assignment of radio frequencies directly relate to the ability of service providers to efficiently use this scarce resource through capital and infrastructure investments.

Bayan Muna Representative Teddy Casiño in his privilege speech Monday explicitly points to PLDT-Digitel’s overwhelming 71 percent market share, a telco behemoth that will monopolize the market.

“This abhorrence of monopolies is enshrined in the Constitution. Section 19, Art. XII of the 1987 Constitution states: “The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed,” said Casiño.

“A deal that would reverse the policy of demonopolization (in reference to Republic Act 7925) in the telecommunications industry was certainly not contemplated by previous Congresses and should not be tolerated by the 15th Congress.” At yesterday’s Senate hearing, Casiño reiterated, “This is the spirit of RA 7925 to slay the monster of PLDT’s stranglehold in the industry in the past. We should not bring back the monster we wanted slain in the first place,” the Congressman added.

In a recent Senate hearing, Globe chief legal counsel, Rodolfo Salalima warned that if the government allows the PLDT-Digitel deal to go through without correcting its frequency allocation, this deal violates the National Telecommunications Commission Memorandum Circular No. 07-08-2005 (Rules and Regulations on the Allocation and Assignment of 3G Radio Frequency Bands) that states, “Entities with more than 50% of common stocks owned by the same person or group of persons shall be considered as associated applicants, at the time of application, and such entities shall be allowed to elect one of them to proceed in the filing of application for 3G services and 3G radio spectrum before the Commission.”

The consolidation of PLDT and Digitel will result in a lopsided imbalance of spectrum allocation in their favor. Globe serves 27.3 million subscribers with only 99 MHz while Smart and Sun will effectively serve 60 million subscribers with 372 MHz. This means Globe is serving 276,000 subscribers for every 1 MHz of spectrum it has while Smart and Sun will only address 161,000 subscribers for their every 1 MHz of spectrum.

Particularly in 3G cellular service, the ratio of PLDT to Globe’s allocation is 4.5:1, a clear disservice to millions of Globe subscribers at present.   “If PLDT-Digitel is saying they need all the frequency they have with only 60 million subscribers, Globe subscribers are also entitled to a fair share of the State’s frequencies which they should enjoy through better products using more advanced technology. Globe has only 10 MHz to serve 27 to 30 million subscribers, then PLDT should only have 23 MHz for its 60 million subscribers. PLDT should divest of its unused 22 MHz frequency they currently have,” added Salalima.

Having pioneered digital mobile technology and text messaging in the Philippines, Globe also recently introduced 4G mobile technology to Filipino consumers, in response to the increasing need for mobile data. (FREEMAN)