Globe urges gov't to review PLDT-Digitel deal, enact anti-trust law

Local telecommunications firm Globe Telecom on Tuesday urged government and concerned agencies to carefully study the share-swap deal between telco giant Philippine Long Distance Telephone Co. (PLDT) and erstwhile third player in the local market, Digital Telecommunications Philippines Inc. (Digitel) ’Gov’t should preserve competitiveness’ In a press conference following its annual stockholders meeting, Ernest Cu, president and CEO of Globe Telecom, called on the government to discuss the impact of the deal, given how important the telecommunication sector is to the local market. “The government should act to preserve the competitiveness of the industry," Cu remarked. “There are concerns being raised by the public regarding the anti-competitive nature of the deal." In late March, PLDT announced its acquisition of Digitel from JG Summit Holdings for P69.2 billion, prompting fears of monopolization arising from the deal given that there are only three telco players in the local market. Anti-trust law needed Cu likewise agreed that having an anti-trust law enacted in the Philippines would help curb monopolistic tendencies of some Philippine companies. “It is always a good idea to have a regulator when competition is being impeded, and for the regulator to know what the points of relief are," he said. “There are models of tough anti-trust laws in the United States and in Europe. These are mature practices of managing competition, which can fulfill the need for one here," he added. The passage of an Anti-Trust Law was one of the key legislations pushed by President Benigno Aquino III during his first State of the Nation Address in July last year. “According to our Constitution, it is the government’s duty to ensure that the market is fair for all. No monopolies, no cartels that kill competition," he stressed. “We need an Anti-Trust Law that will give life to these principles, to afford Small- and Medium-Scale Enterprises the opportunity to participate in the growth of our economy," he added. Pending anti-trust bill Recently, an act penalizing anti-competitive agreements, abuse of dominant power, and anti-competitive mergers formed a belated part of Aquino’s 23 priority bills submitted to Congress. The said act will also seek the establishment of the Philippine Fair Competition Commission, which will oversee anti-competitive movements in the industry. Despite the absence of such a law, Cu said Globe is poised to continue making strides in growth in its own backyard. “Any merger is complex; how quickly they can do that is up to them. Globe will focus on its own strategy, and will continue executing on what we have planned," he said. “The immediate effect [of the deal] is still a question. We don’t run a business hoping our competition will soon crumble," he added. Globe maintains its strategy Cu said Globe will continue to build on its strategy anchored at customer-centricity, which hinges on delivering superior customer service to its subscribers. “Strategies of late have yielded good results for Globe starting the third quarter of 2010, as share gains in postpaid and prepaid have increased and demand has been reinvigorated," he explained. The company said they also have a transformation plan in place, particularly in bolstering the network’s quality and capacity, in order to respond to the impending increase in traffic brought about by recent trends of high mobile broadband consumption. More 3G usage seen “The trend [dictates] more use of broadband and broadband-capable handsets, which places an increasingly large load on the 3G side of our network," Cu stressed. To address this, Cu said they will continue to lobby with the National Telecommunications Commission (NTC) for additional frequencies to service increased demands in data traffic. “There is still a remaining 3G frequency [which the NTC] can give out. Globe is the only telco qualified to launch and have an effect on the market, in terms of improved mobile broadband experience," he pointed out. According to Froilan Castelo, head of regulatory affairs division, Globe Telecom, the recent Digitel acquisition by PLDT should prompt the NTC to do a review of its frequencies. “It’s a good time for NTC to do this periodic review, and see, for that matter, if there are providers who have more than enough frequencies allocated to them," he said. As it stands, with the acquisition of Digitel, PLDT now commands the biggest 3G radio frequency spectrum in the country at 45MHz, while Globe maintains a small 10MHz. — TJD, GMA News