NTC reviews Smart complaint vs Digitel

The National Telecommunications Commission (NTC) is currently reviewing the merits of a petition filed by Smart Communications Inc. last Wednesday seeking the cancellation by NTC of Digital Telecommunications Inc.’s (Digitel) license to operate a cellular mobile telephone service (CMTS).

NTC Commissioner Eliseo Rio told The STAR that the commission’s legal department is now looking at the merits of the complaint and may ask Digitel to respond to Smart’s petition.

The STAR earlier obtained a copy of Smart’s petition submitted with the NTC asking the latter to cancel Digitel’s CMTS provisional authority on the grounds that the Gokongwei-owned firm failed to comply with the conditionalities specified in its license.

Rio said that if indeed it can be shown that Digitel violated the provisions of its PA, this can constitute a ground for cancellation or revocation of its license to operate such CMTS.

The CMTS market is currently dominated by Smart and sister company Piltel on one side, and Globe and its subsidiary Islacom, on the other. Digitel is supposed to be the country’s third CMTS operator.

As this developed, Digitel branded the filing by Smart of a petition for the cancellation of Digitel’s cellular license as a "dilatory tactic" to prevent the interconnection of the two companies’ networks.

In a disclosure to the Securities and Exchange Commission (SEC), Digitel assistant corporate secretary William Pamintuan said that the administrative case filed by Smart is merely a dilatory tactic to frustrate the implementation of the government’s mandate for the interconnection of all telecommunications networks as embodied in Executive Order No. 59 and Republic Act No. 7925 or the Public Telecoms Act.

The NTC is scheduled to meet with representatives from both Smart and Digitel today to mediate regarding the former’s alleged refusal to interconnect the Smart CMTS network with that of Digitel’s.

Other than operating the country’s second biggest landline telephone business next only to Smart parent firm Philippine Long Distance Telephone Co. (PLDT), Digitel is also scheduled to start commercial operations of its own cellular network before the end of this year to compete with that of Smart and Ayala-owned Globe Telecom.

Interconnection of the respective networks of both Digitel and Smart is necessary if the cellular customers of the two are to call or text each other. Smart has refused to interconnect saying there is nothing to interconnect to since Digital’s network is not yet in place.

Pamintuan also told the SEC that contrary to Smart’s claim, Digitel is not holding back on its investments in the cellular network infrastructure.

Smart legal counsel Rogelio Quevedo said it appears that Digitel is holding back investments on the network infrastructure. It is believed that the reason for the delay is that the Gokongwei group is awaiting the results of its proposed acquisition of part of First Pacific’s 24.4-percent stake in PLDT (which owns 100 percent of Smart) before it decides what to do with its cellular project.

"Digitel is proceeding with the implementation of its CMTS network. In fact, Digitel already has a working CMTS network and it had already asked the NTC to intervene in its interconnection negotiation with Smart in view of the latter’s refusal to interconnect Digitel’s CMTS network," Pamintuan said.

According to Smart’s petition with the NTC filed last Wednesday, the granting by NTC of a provisional authority for Digitel to engage in CMTS is subject to certain conditions. This includes the start of full commercial operations within one year from the date of acceptance of the PA last Aug. 7, 2000.

The said PA also states that failure of the applicant to complete the installation and commence commercial operation of its cellular mobile system within one year from the date of acceptance of the license shall be ground for the revocation or cancellation of the PA.

An actual inspection conducted by NTC’s common carrier authorization department (CCAD) showed that Digitel failed to install and operate the facilities required in Phase I or a total of 98,696 lines. The CCAD also noted that these is ‘considerable’ delay in the implementation of the rollout plan submitted by Digitel and that the latter admitted that it is expecting a ‘soft launch of its CMTS only by the following month.

The inspection report was attached to the order issued by NTC last July 22 which extended Digitel’s PA until Feb. 7, 2005.