Telecom firm lashes back at critics

Globe Telecom fired back at its critics, saying a new challenger was not the solution to better services and that San Miguel Corp.— the last company that attempted to break into the sector—would have had difficulty succeeding because of “barely adequate” infrastructure.

Globe’s strongly worded statement was a departure from earlier releases, which mainly focused on the telco’s network expansion plans or called for the government to cut bureaucratic red tape.

The criticism now of SMC’s telco ambitions comes as Globe and PLDT are locked in a legal dispute with the Philippine Competition Commission, which wants to review the duopoly’s P70-billion joint buyout of SMC’s telecommunications unit on May 30.

The statement, which was quoting Globe CEO Ernest Cu, noted that Globe was ready to compete with new players, but barriers to entry were not the PLDT-Globe incumbents but massive investments and the stiff local government unit permitting process, which delayed the rollout of crucial cell sites.

Cu added that a new player should invest in incremental infrastructure, and not rely on sharing infrastructure that PLDT and Globe had already built.

Referring to SMC, Cu said the conglomerate was eyeing to challenge PLDT and Globe within the year, but after they acquired the company’s telco unit, it was found to have just 230 cell sites.

“That is after two years of trying to build a network. You’ve heard about them trying to build their network but in reality, you go there, there’s nothing in there,” Cu said in the statement. “How can this supposed player compete when they cannot deploy a network?”

Cu added that SMC’s cell sites had to be “dismantled” since the buyout, since these were overlapping with PLDT’s and Globe’s networks.

“There is no incremental value because the sites they built on already have existing cell sites,” Cu said.

SMC president Ramon S. Ang did not immediately respond to a request for comment. A PLDT official also did not immediately respond.

Ang said earlier SMC was planning to launch a “better and cheaper” mobile internet service within this year. The initial plan would cover Metro Manila and nearby provinces.

Ang said SMC required less cell sites because of SMC’s radio frequencies, including those in the 700 megahertz band, which could efficiently cover wide distances and penetrate buildings. Prospects for SMC’s entry weakened after talks with possible partner Telstra Corp. collapsed in March. Ang said sale negotiations with PLDT and Globe started shortly after that.

Cu said that in a mature telecommunications market like the Philippines, “late entrants end up being bought by one of the other players.”

He said the government should instead make it easier for telecom industry players to build more infrastructure to adjust to growing demand. To deploy network infrastructure, it takes 25 permits and about eight months to complete the approval process of one cell site, he said.