Globe seeks NTC say in PLDT-Digitel deal

MANILA, Philippines – Ayala-led Globe Telecom has asked the National Telecommunications Commission (NTC) to intervene in the recent acquisition by Philippine Long Distance Telephone Co. (PLDT) of a majority stake in rival Digital Telecommunications Phils. Inc. (Digitel).

Globe warned in a letter to the NTC that the PLDT-Digitel deal threatens free competition and ultimately gravely places at risk the public good, given the significant market power and influence now consolidated and vested in the PLDT Group.

Reacting to Globe’s letter, PLDT, through spokesperson Ramon Isberto, pointed out that Globe is criticizing PLDT for a deal that Globe itself had sought but failed to get. “It is now pressing government for concessions to make up for a bid it lost,” he said.

For its part, Digitel said in a statement: “We are very surprised with Globe’s sudden opposition to our deal. There were several serious telecom players that have approached us and we found PLDT’s offer most acceptable in terms of continuing and expanding Sun’s unlimited offering and other value for money products for the benefit of the Filipino consumers.”

Globe counsel lawyer Rodolfo Salalima emphasized that Republic Act no. 7925 or the new Telecoms Policy Act was enacted into law precisely because of the need for the country to liberalize and demonopolize, and to veer away from the monopoly or the dominant carrier which, because of its dominant clout, power, and influence, constricted and stifled, instead of led, the growth and expansion of public telecommunications services in this country. RA 7925 took effect March 1995.

He quoted then Sen. John Osmeña, in his sponsorship speech of Senate Bill 11 (now RA 7925), that “our telecommunications system has been cited as backward, inadequate, and a major constraint to the global competitiveness of our industries.”

PLDT recently acquired 51 percent of Digitel, which owns the Sun Cellular brand, from the Gokongwei Group, and hopes to purchase the remainder from small shareholders during a mandatory tender offer.

Salalima said that threat alone to free competition and ultimately, to public service and to common good, even before monopolistic powers can be and are exercised and consummated, more than suffices for the NTC to act reasonably and responsibly, conformably with its legal mandate to enforce and implement the letter and spirit of RA 7925.

 “(NTC) must intervene and act now. It cannot and must not shirk from its legal obligation to intervene in the PLDT/Digitel deal and regular, if not forestall, the deal’s grave implications and impact on free competition and, in the long term, the common good. The inherent police power of the state can and must also be utilized for the common good,” he added.

He stressed that the NTC must start leveling the playing field now in the name of free competition or risk a return to the monopoly of old and precisely abandoned by RA 7925, adding that PLDT’s cellular market share, because of the deal, has now grown to 70 percent, while that of Globe is 30 percent.

Globe likewise called on government to enact a new anti-trust law, even as the NTC must now enact anti-trust policies/regulations whose provisions may be given retroactive effect, also to level the now mismatched playing field between the PLDT Group and second running Globe in the market of competition.

Specifically, it asked NTC to issue a circular defining a monopoly or a dominant position carrier (or significant market power), so that when any telco or group controls a minimum 50 percent of the market in a single telco service sector, it will be subject to sanctions or restrictions by government to protect market rivals and allow the latter to compete evenly with the dominant carrier.

Globe likewise called on the regulator to revisit the spectrum frequency assignments and reassign or evenly distribute/redistribute to the former or other qualified players to protect and give them an even fighting chance against PLDT. It noted that in the cellular service, Globe’s frequencies acquired as against PLDT now stand at a ratio of 1:3.5 in favor of the latter.

 It asked Congress to pass new laws to strengthen and give more teeth to the current anti-trust laws, taking into consideration the PLDT/Digitel deal and spelling out with greater detail the concept of monopoly, dominant position, or significant market power.

Globe furthermore recommended that interconnection between telco service providers be enforced firmly by the NTC and government, and that an official domestic IP peering policy be formulated to help improve internet service quality. IP peering is similar to interconnection among telcos, except that it applies to the Internet space.