• Alliance of capital among telecom companies

    Emeterio Sd. Perez

    Emeterio Sd. Perez

    IN the old days of telecommunication in this country, the Philippine Long Distance Telephone Co. was a virtual monopoly that an applicant for a landline required the patience of a biblical man named Job in waiting for PLDT’s approval of his or her application.

    And when the go-signal for the installation of the telephone line finally came, the linemen made you believe you were being given an exclusive line. They meant to say you did not have a party line or even party lines (in plural form), that would mean more than one telephone number using the same line.

    Then one day, while dialing a number, you discovered you did not have the privacy in your own telephone, because you suspected that some unscrupulous people were able to encroach on your “exclusive” line. If PLDT knew about the encroachment, then it allowed it for additional revenues. If not, then you are in bad company. Chances are, your line has been illegally tapped by a party line and PLDT could not do anything about it.

    This has happened to the family. Every week, 61-61-42, which was the number assigned to us back in the early 1970s, belonged to us only from Monday to Friday. On Saturdays and Sundays, our “exclusive” line had a party line engaged in taking bets for horse races, thus taking away the “exclusivity” of the telephone line away from us.

    Why am I writing about what in the 1970s could be considered the convenience of modern living?

    The answer should be obvious. You have to look at what is happening today to the telecommunications industry. If in the old days, PLDT was already a monopoly, it still is. While it has new owners in First Pacific Group of Hong Kong, it nevertheless had to contend with what used to be three major competitors until the alliance of capital set in to ease the burden of competition.

    In business, this is the accepted reality: the big players kill the small ones but would willingly unite with other similarly big if not bigger conglomerates to even grow bigger to avoid competition. As the saying goes, in unity there is strength. But then again, in business, union or marriage happens only among the industry giants.

    Party line may have vanished but in its place, monopoly reappeared. This time, the consumers, as the affected public are more popularly called, have to fight not the industry giants but the giants that have formed a union among them as their way of fighting not each other but the consumers.

    Consider these developments:

    While First Pacific took over PLDT via its Filipino-owned companies, the Lopezes and the Zobels, apparently, did not want to stay behind in a newly opened industry and ventured into a very expensive telecommunications business. The former had Bayan Telecommunications Inc. (BayanTel) while the latter owned Globe Telecom Inc. Businessman John Gokongwei Jr., who controls JG Summit Holdings Inc., the family’s listed holding company, organized Digital Telecommunications Phils. Inc. (Digitel).

    The entry of the Lopezes, the Zobels and the Gokongweis, who are among the Philippines’s wealthiest families, posed a slight threat to PLDT’s telecom monopoly; but it was a threat that did not to last long. Many years later, the Gokongweis joined the PLDT group by swapping their ownership in Digitel with PLDT shares. The P69-billion or so share swap entitled them to at least two seats in the board of the latter, and the regular dividends due the holders of PLDT common shares.

    Globe Telecom, meanwhile, has taken over BayanTel by assuming the Lopez-owned telecom company’s $674-million debts as of May 31, 2003.

    BayanTel’s huge debts that the Zobels have assumed might be huge. Yet, they looked forward and were optimistic that “ensuring that Bayantel remains a going concern would allow both companies to become more competitive in the current industry environment.”

    Who between PLDT and Globe Telecom would win the war? Your guess is as good as Due Diligencer’s. But one thing is certain: Both conglomerates are for the long term. If not, why would First Pacific welcome Digitel of the Gokongweis into PLDT’s fold? On the other hand, the same question should be asked of the Zobels. What for was their takeover of BayanTel if not for capital alliance that would facilitate Globe Telecom’s expansion into allied telecom ventures outside Metropolitan Manila?



    Please follow our commenting guidelines.

    1 Comment

    1. The DAP should be declared Unconsititional while the Judiciary Fund should be open for examination by Congress and COA though heavens falls. These twin happenings will be for the benefit of the oppressed pinoys. Next for investigation are the Monopolies like Meralco, Manila Water, Maynilad, the Telcos, the aboitizes, ongpins,Sy, Lucio, Consunji, Villar, MVP, Razon, Lopezes, Ayalas, Co, hay naku ang dami….