Correct the telco fraud

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AS a new administration and Congress prepare to take office, the entire nation is watching and listening with great anticipation for signs that the “change” we have been promised is indeed coming. This creates a few difficulties, however, because one stakeholder’s idea of “change” is different from that of another, and whether the new President and his legislative counterparts are truly up to the task of balancing divergent and sometimes conflicting wishes of various constituencies remains to be seen.

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Perhaps, our new leaders can put priority on those issues that are least controversial but needing urgent attention; in other words, things that everyone can agree on. There are many issues that likely fall into that category, and one that has some of the biggest practical implications is the appalling state of the country’s telecommunications infrastructure.

The telecom industry is ostensibly a deregulated, Filipino infrastructure sector, but it is in a very real sense a fraud: It is not deregulated, but the epitome of regulatory capture, and the companies that have taken control of the market are not Filipino.

For years, the Philippines has been at the mercy of two conspiratorial telecom providers, the Philippine Long Distance Telephone Company (PLDT), which is largely owned by the corporate web controlled by Indonesian tycoon Anthoni Salim, and Globe Telecom, whose biggest shareholder is Singtel, which is in turn controlled by Singapore’s state-owned investment arm Temasek Holdings.

Both companies offer services under various brand names to provide consumers the illusion of choice, but the sad fact of the matter is consumers have none. There is no competitive difference whatsoever between the two telecom giants’ services: Both are grossly inadequate and overpriced, and the reason for that is that they continue to benefit from generous regulation and business risk mitigation, which successive governments since the Ramos Administration have unquestioningly assumed were necessary to keep their largely foreign investments in the country.

To Singtel and the Salim group, the Philippines’ only importance is as a revenue source; so long as the current state of regulation allows them to collect healthy revenues while putting forth the least effort, they will do so. That is an infuriating reality, but one which the companies, which after all are for-profit enterprises, really cannot be blamed for; rather it is our government on whom the blame should fall, for letting the state of affairs persist.

We are certain, given the anxiety of the country’s consumer and business sectors over the lousy infrastructure that greatly increases the cost and reduces the efficiency of communication in the country, that there are many very good ideas about how to improve the poor state of affairs. We strongly suggest that the incoming Duterte Administration invite these ideas, and prioritize their assessment with an eye to pushing the telecom industry to be what it should have been all along in a rapidly-growing, youthful, and tech-savvy nation like this one, an industry that is competitive and offers its customers a high level of service at a fair price because it is so. It is an aim that everyone will support, and has a potentially enormous positive payoff in increased investment and faster development. The Duterte Administration is not going to get many chances like this one to make everyone happy; it should not let the opportunity slip through its grasp.

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8 Comments

  1. Marc Orcullo on

    Tama ka dyan. This is one issue where the media should focus attacking government NOT sow intrigue.

  2. There was even a time when the government wanted to include China in dominating our telco. The incoming administration seems to favor the previous GMA administration by the appointment of KKKs in that administration.

  3. Thank you; I couldn’t agree more. As the country known to have the slowest and most expensive broadband services for many years now, this problem should have been tackled years ago (as usual, the administration responsible for the breakdown in infrastructure – MRT, LTO, etc. – and the worst traffic ever was sleeping at the wheel). What is the NTC doing? I say bring in the foreign companies to fix this, if necessary. The current players are in the guise of locals, hence, enjoy the protection against other foreign players.

  4. I cannot imagine all our post-EDSA presidents can allow this to happen, most especially Noynoy Aquino – but there it is…

  5. Edwin Subijano on

    Anthoni Salim’s majority ownership of PLDT is actually a violation of the Philippine constitution. But the Securities and Exchange Commission has seen fit to let him violate the constitution and does nothing about it. That is why the Philippines is nothing but a milking cow for foreign businesses.

    The Philippines government must nationalize the Telecom industry and get rid of the Salim group, the Cojuangcos and the Zobel-Ayalas !!!

    • hinde ba dapat maparusahan si MVP dahil sya ang naging paraan para yurakin ang ating konstitusyon.

  6. Our communication, water, energy and electrical infrastructure must be controlled by Filipinos not foreigners. We also must have local Filipinos, like OFWs and Filipinos who wants to invest in our national infrastructure can be done easily. Singaporeans are rich nation, not because few billionaires own the blue chip companies but their middle class citizens are also owners of those progressive industries. It’s time for us to copy Singapore’s blue print of success.

    • I am with you Mr. Esteban, I strongly agree that the time has come to make investments to all OFW who are interested in this scheme.