• Competition agency should finish probe of telco deal

    3

    Philippine Competition Commission (PCC) Chairman Arsenio Balisacan appears to be taking his own sweet time reviewing the P70-billion deal involving the sale of San Miguel Corp.’s 700 megahertz (MHz) frequencies to Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom. Many folks from the business sector are beginning to raise their eyebrows at the turtle-paced scrutiny of the controversial buyout.

    True, PLDT and Globe filed separate cases with the Court of Appeals (CA) in July questioning the competition agency’s probe into their buyout of SMC’s telco business, but these pending cases have no bearing at all on the PCC’s ongoing investigation into the deal, especially since no temporary restraining order was issued by the CA.

    Considering the widespread public clamor for better and faster internet speeds, it is imperative for the competition agency to conclude its probe as soon as possible, just as it had promised in a press statement last month, where it “[assured]the public and the parties that the Commission recognizes the urgency of the matter and will move quickly to reach a fair assessment.”

    Putting the SMC-PLDT-Globe deal on ice not only affects the competition agency’s credibility, it also puts into question the motives behind the delay.

    Moreover, every single day the buyout deal remains in limbo works to the detriment of Filipino internet users. Why? Because Globe and PLDT will definitely have to rein in their roll-out programs pending the competition agency’s final action or resolution on the transaction. It would be the height of naiveté for Filipino consumers to expect the telcos to go full blast and pour tons of money into expanding their broadband infrastructure while a sword of Damocles hangs over their heads.

    As it is, the apparent delay in the PCC appears to conflict with the ruling of the National Telecommunications Commission (NTC), the government regulatory body overseeing the telcos.

    It will be recalled that the NTC previously approved the co-use of the 700-MHz frequency by PLDT and Globe, subject to several conditions. For one, the telcos must immediately commence and implement the co-use agreement and increase internet speed from the current 1 megabit per second (Mbps) to an average of 5 Mbps in three to six months, at no additional cost to consumers. The telcos were also required to come up with a rollout plan to address the growing demand for broadband infrastructure and internet access.

    PLDT and Globe will have to meet these conditions or face the cancellation of their co-use agreement.

    We’re told both PLDT (and its subsidiary, Smart Communications) and Globe have already submitted their respective three-year roll-out plans to the NTC, which will cover 95 percent of the cities and municipalities in the country with the LTE (Long-Term Evolution) service by the end of 2018. This means billions of pesos in capital expenditures for both PLDT and Globe to support faster internet connectivity, a key concern for most of the country’s netizens.

    According to reports, Globe had spent for and upgraded over 25 cell sites with LTE 700 MHz, more than 600 cell sites with additional 2600 MHz spectrum, and another 1,500 cell sites with additional 1800 MHz spectrum as part of the company’s commitment to improve mobile internet speeds within one year.

    By the end of the year, Globe expects about 2,200 of its existing cell sites, representing over 30 percent of if its network nationwide, to be upgraded using the additional spectrum from the co-use agreement.

    For its part, PLDT subsidiary Smart reportedly fired up its first batch of LTE cell sites using the 700 MHz spectrum in Tanay, Rizal; Matina, Davao City; and Manggahan area in Pasig City. Smart says it plans to activate 360 more cell sites with 700 MHz before the end of the year, initially in Metro Manila, Metro Cebu and Metro Davao.

    Perhaps to prove that the 700-MHz frequencies have been put to good use to deliver the kind of internet service netizens want, the telcos have come out with promos touting more data downloads at very cheap prices.

    For instance, Globe is now offering a GoSurf50 promo that allows a subscriber to have 1G (gigabyte) of mobile data for three days at just P50. Smart has a similar promo called GigaSurf50. These are the second lowest-priced internet surfing promos for prepaid subscribers in the Asia-Pacific region. Only India is cheaper than the Philippines where the same amount of data is being offered by Indian telco Airtel, at a price point equivalent to P36.

    But these infrastructure expenditures, cell site upgrades and even cheap surfing promos might turn out to be exercises in futility if the competition agency decides to tinker with the deal. Also, the longer it takes for PCC to finish the probe, the harder it is to undo what has already been done. For one, how do you reverse the capital layout, upgrades and promos already being enjoyed by internet users?

    There is no excuse for the PCC not to end the probe quickly, more so after Balisacan boasted that the competition agency was able to act on 47 merger and acquisition deals even before the anti-trust law’s implementing guidelines were issued last June. Unless, of course, some powerful personalities have taken an undue interest in the telco deal.

    Share.
    loading...
    Loading...

    Please follow our commenting guidelines.

    3 Comments

    1. I keep hearing how government ( NTC) and the telcos are conspiring to keep competition out, but I haven’t heard any explanation how they are doing this other than speculation. And all this lashing out only distracts us from the real problem. If there’s one reason there’s no competition, it’s because the NTC has made it too difficult for ANY telco, whether the present ones or prospective competitors, to start and then maintain a telecom presence. There are far too many restrictions, permits and fees involved. Smart and Globe has had to deal with this and still does, and they have a ten year headstart over any prospective new player. SMC couldn’t join in despite already having some infrastructure in place. Telstra backed out because they saw they would have difficulty turning a profit under these harsh conditions. Clear out those roadblocks so we can finally have competition.
      And even if the PCC declares the SMC deal illegal, what is their next move? Return the bandwidth to SMC who couldn’t roll it our in all the years they’ve had it? Remand it to the NTC where it will sit untouched for years just as it had been while SMC had it? Meanwhile we still have to deal with our glacial internet. IInstead, allow the rollout of the two telcos to continue so we can finally get that better internet the President demanded.

    2. Arsenio Balisacan seems unfit for the position. The job requires someone who has the grit and balls to fight it out with the big boys, not some academic goody-goody type.