As Sun sets on PLDT’s field, Globe hits hard

Globe Telecom Inc. has gone on the offensive, laying new charges against rival and industry leader Philippine Long Distance Telephone Co., in an effort to prevent what appears to be inevitable—PLDT’s takeover of Digitel Telecommunications Philippines Inc., operator of the Sun Cellular brand.

Although the National Telecommunications Commission has yet to approve the deal that will allow PLDT to assume control of Sun Cellular, PLDT has already announced that the takeover will be completed by the end of next month.

Globe, a unit of the Ayala Group, accused PLDT of having anti-competition policies that would only get worse once the Digitel takeover takes place.

In a statement last week, Globe also called on the government to ensure that the deal would not lead to an industry imbalance that could kill competition and lead to higher rates for consumers.

Globe, which corners about a third of the local telecommunications market, then blamed PLDT for high landline call rates in 31 provinces in the country—a charge PLDT vehemently denies.

The Ayala telco said some consumers had to pay long-distance rates for calls made within the same area because PLDT refused to act on requests to interconnect with the former’s landline network.

“Customers cannot enjoy local calls when connecting to a PLDT landline within the locality, and vice versa, because PLDT has yet to act on its request for interconnection in 31 locations,” Globe said.

The interconnection between two networks operating in the same area is required under Republic Act No. 7925, also known as the New Telecoms Policy law.

According to Globe, it has been requesting PLDT for interconnection since 2006 to no avail. Local landline calls cost P3 each, but without interconnection, calls made between two subscribers of different networks can cost twice as much.

Answering the allegations, PLDT said it did not invest billions of pesos on its own phone network only to give its rival Globe a free ride. It added that Globe was merely trying to “hostage” the Digitel deal to get free concessions from PLDT.

PLDT likewise said Globe’s other motive for raising issues regarding the Digitel deal was to “kill” the Sun brand.

Despite being the smallest player in the telecommunications market, Sun Cellular has been able to force both PLDT and Globe to bring down their call and text service rates or risk losing market share.

“Globe has been the hardest hit by Sun Cellular’s popular unlimited services and has lost many subscribers to Sun Cellular,” PLDT regulatory affairs head Ray C. Espinosa said. “Sun Cellular has also outpaced Globe in terms of postpaid subscribers. Globe knows that with the PLDT investment, Digitel will now have the much-needed financial resources to sustain and continue the Sun Cellular unlimited services. This is what Globe dreads.”

Aside from Globe, consumer groups and other smaller telcos have expressed their concern over the PLDT-Digitel deal. When the deal is done, PLDT will increase its market share to about 70 percent from 55 percent.

In a position paper filed with the NTC, Eastern Telecommunications Philippines Inc. urged the regulator “to protect the public interest, to impose such conditions so as to prevent the commission of anti-competitive behavior.”

“With such dominance of the entire telecommunications services market, the PLDT combine will be in a position to discriminatorily price its services,” ETPI said.