Globe renews call for intervention by NTC

MANILA, Philippines—Ayala-led Globe Telecom Inc. has disputed claims that it uses network frequencies inefficiently, resulting in the lower quality of services for its subscribers.

The company over the weekend renewed calls for the National Telecommunications Commission (NTC) to strip rival Philippine Long Distance Telephone Co. (PLDT) of some of its mobile network frequencies once the latter’s takeover of brand Sun Cellular is completed.

Globe legal counsel Rodolfo Salalima said the spectrum frequency assignment must be revisited by the National Telecommunications Commission, rationally looked into, and reassigned.

This will give smaller players like Globe a chance against PLDT, which, after the deal with Sun’s parent Digitel Telecommunications Philippines, will corner 70 percent of the country’s lucrative telecommunications market.

He said having a single player cornering a large part of the industry would reduce competition and slow down innovation. “Ultimately the public good is gravely placed at risk,” he said.

PLDT chairman Manuel V. Pangilinan declined to comment on the allegations, saying “it’s up to the government to determine what’s best for the industry.”

The NTC is holding a jurisdictional hearing regarding the deal on Monday.

Globe claims that its frequencies acquired as against PLDT’s now stand at a ratio of 1:3.5 in favor of PLDT. This means Globe, with 26.5 million subscribers and 99 megahertz, serves 268,000 subscribers with each megahertz, while PLDT’s Smart and Digitel’s Sun will have only 161,000 subscribers per megahertz.

“Theoretically, Smart and Sun should not be assigned more than 224 Mhz of the spectrum (as against the 372 Mhz after their consolidation) to cater to 60 million subscribers,” Globe said.

Globe explained that, all things being equal, it costs less to serve the same number of subscribers with more spectrum from an investment-to-capacity perspective.

Salalima said that, with more spectrum, PLDT-Digitel will be able to serve more customers and deliver more services than Globe.

PLDT earlier said data from the NTC showed that PLDT was more efficient in its use of frequencies, implying that Globe should find ways to be more efficient before it asks the NTC for more frequency allocations.

The PLDT-Digitel deal is scheduled to be completed by the end of June.

The Securities and Exchange Commission (SEC) has approved, in principle, a request by PLDT to be exempted from having to put in escrow the P69.2 worth of PLDT shares that will be paid the Gokongwei group for the majority stake in Digital Telecommunications Philippines Inc.

SEC commission secretary Gerard Lukban said that to protect shareholders of the buyer, the shares to be issued in payment for an acquisition should be held in escrow by the corporate regulator and will be released only upon the transfer of ownership of the property acquired, which in this case involves Digitel shares and debt.