Showdown looms between NTC, Globe

A showdown looms between the National Telecommunications Commission and industry leader Globe Telecom after the telecommunications giant warned that plans of NTC to suspend Globe for two months for exceeding its subscriber capacity may be unconstitutional.

Globe also warned that suspending additional sales will only create more problems, and give rise to a ‘blackmarket’ for prepaid cards and SIM cards.

NTC Commissioner Joseph Santiago said the commission will issue on Monday an order that will enjoin Globe from accepting new subscribers for two months after the company allegedly exceeded its capacity by around 200,000 during the period covered by the investigation, which was between July and August this year.

In the case of Smart Communications, the company still has unutilized capacity of 143,531 lines during the period covered by the investigation, the NTC said.

Globe president and chief executive officer Gerardo Ablaza said: "If NTC is going to penalize us, then it should give us a chance to challenge the process and an opportunity to explain. Otherwise, there will be no justice."

Ablaza suspects that NTC may have used a different set of assumptions when it computed capacity utilization.

"They may have used a higher average consumption per subscriber per day. I can’t think of any other reason why NTC would conclude that we have exceeded our capacity when all our figures show that we have not," he said.

The Globe top official said the company needs to find out the basis for the capacity computation, as of when, and if the capacity is sufficient for continuing sales, the basis for the penalty.

Lawyer Rodolfo Salalima, Globe senior vice president for corporate and regulatory affairs, said that based on the presidential order which served as basis for NTC to undertake its investigation of the carriers, the commission may ask the operators to voluntarily suspend sale if they are found to have exceeded their capacity.

"NTC cannot unilaterally penalize us without violating the constitutional provision on due process which gives us the right to be heard. NTC rules provide that the commission must first constitute as a quasi-judicial body and hear the case before it can impose penalties," Salalima said.

NTC undertook the investigation of all carriers in August in line with a directive from President Estrada ordering NTC, the Department of Trade and Industry, and the Department of Transportation and Commission to inspect cellular phone companies for alleged insufficient network capacity that led to numerous subscriber complaints.

Ablaza said Globe already spent P300 million when it voluntarily offered rebate packages to its subscribers as a result of the July ‘glitch’ in its network. The problem was traced to a corruption in the database of its platform, and problems with its cellsite rollout in Quezon City, Northern Luzon, and Tarlac.

He said that whether one looks at switch capacity or radio capacity, there is no such thing as subscriber overcapacity in the case of Globe.

Globe officials noted that even in August when the investigations were being conducted, Globe had a capacity of 2.35 million against only 1.9 million subscribers. In November, capacity grew to around 3.4 million versus three million subscribers while capacity is expected to grow to 4.5 million in December as against an expected subscriber base of around 3.4 million.

In terms of SMS capacity (texting capacity), Globe said it has a capacity of 123.12 million messages per day as against some 28 million messages per day that are being processed in the Handyphone network.

Ablaza said they plan to meet with NTC officials if indeed a suspension order will be issued on Monday. Another official revealed that in case the NTC fails to reconsider its decision, then Globe can always appeal to either the Court of Appeals in case the commission exercises its quasi-judicial function and to the regional trial court in case this is part of the body’s administrative function.