Squeeze play?

Finally, after almost three months since PLDT (owner of Smart mobile) and Digitel (owner of Sun mobile) announced their controversial merger, the Aquino (Part II) administration gave its approval.

The policeman of the telecom industry, the National Telecommunications Commission (NTC), seems to have taken the time to scrutinize the merger. The NTC thus came up with a number of conditions for PLDT and Digitel. I thought the conditions were designed to benefit mobile phone users.

The main competitor of Smart, the Ayala group-owned Globe Telecom, earlier warned the merger would create such a dominant player in the industry, tantamount to a “monopoly.” Such dominance could lead to higher fees and call rates. In short, it would be bad for the public.

As the NTC approved the merger last week, it also issued a new rule, in effect cutting “interconnection charges” for text messages even between two different companies—between Smart and Globe, for instance. The current rate is 36 centavos per message. The NTC cut it to only 15 centavos, or by more than half.

Companies like Smart and Globe have to sit down and amend their “interconnection” agreements to follow the NTC directive. The NTC gave them only 10 days after the new NTC rule took effect to do so. I take it that NTC would not tolerate any foot-dragging. It would not entertain excuses.

We can expect the lower rate for text messages to raise the demand for the service. Can the companies really cope? As it is, during rush hours, or even during lunch breaks—not to mention special days such as Christmas—text messages take almost forever to deliver. The mobile companies simply could not cope. With the rates now lower by half, technically, the demand should double.

And so part of the NTC new rule says that the mobile companies must invest in new facilities, so that they can deliver text messages—at any volume, whether it is Christmas or cold weather—within 30 seconds. I like this NTC already.

As for the subscribers of Sun Cellular, which was the first company to offer unlimited calls and texts, the worry was that PLDT would do away with such a service after the merger. It was said that Sun’s unlimited service already ate into the markets of both Smart and Globe. PLDT could simply use the merger to kill the unlimited service offered by Sun.

Thus the NTC ruled that PLDT could not remove Sun Cellular’s unlimited service.

But here is something that even got the nod of Globe Telecom, which was actually the lone company raising hell over the PLDT-Digitel merger: The NTC ordered PLDT to divest itself of the so-called 3G radio frequency, the hottest thing in the mobile business today.

PLDT entered the 3G segment through a subsidiary called CURE, or Connectivity Unlimited Resource Enterprise, operator of the “Red Mobile” brand of wireless service. With the divestment order from NTC, Smart is expected to absorb CURE’s subscribers, at the same time selling its interests in CURE such as franchise, radio frequency and such.

Perhaps Globe would want to bid for the 3G frequency of CURE? Its lawyers already praised the NTC on its order to PLDT to divest from CURE.

But then, again, there would be other interested buyers, such as the San Miguel conglomerate, which has a number of telecom companies like Bell Telecoms, Liberty Telecoms and Express Telecoms.

Hopefully, it would be a hassle-free bidding?

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Remember the “West Tower” controversy over the leak in gas pipeline owned by the Lopez group’s FPIC, or First Philippine Industrial Corp.?

Well, a group of unit owners in the condo filed yet another case in Makati City. Or to be more precise, their lawyers filed the case. It should be the third case filed on the same gas pipeline incident.

Anyway, when the group in the beginning filed a petition for a “writ of kalikasan,” which was an invention of the Supreme Court, the case became a lofty cause from some environmental activists, seeking to compel FPIC to clean up the mess from the leak. The case gained public sympathy.

But the group, including their feisty lawyers, may be chipping away at this goodwill, following the filing of other cases. After the “writ of kalikasan,” the group lodged another petition with the Makati Regional Trial Court. It sought a whopping P2.3 billion in damages.

Real estate developers estimated that such an amount would be enough to build two, if not three, buildings similar to West Tower.

Anyway, the handling judge in the Makati RTC dismissed the damage suit, simply because the group did not want to pay for the required filing fees.

Last week, the group filed yet another suit before the Makati City Prosecutor’s Office, this time accusing top officials of FPIC of “criminal negligence.”

“We’ve filed for damages and yet it seems FPIC isn’t listening to us,” their lawyers were quoted as saying in one newspaper report upon filing the latest suit. “Maybe with this case, they’ll start to listen to us.”

What is that—let me see, could it be squeeze play, as they filed case after case to force FPIC to cough off a lot of money?

Well, from the start, nobody expected the pipeline accident to move along a nonconfrontational track, with everybody listening and acting for the best—or balanced—interest of all concerned. It was bound to have a lot of noises, all the way up to the Senate.

But I must note that the company, FPIC, actually moved along that line. After it became clear that the gas “leak” came from the pipeline, the company immediately mobilized its resources to plug the leak and conduct a remediation and cleanup to the extent of tapping local and global expert, including US-based CH2M Hill, to help in the cleanup operations.

CH2M Hill is a giant global engineering firm that has successfully handled the decontamination of some of the world’s most toxic sites, which included some decommissioned US nuclear armament production facilities.

While FPIC has been trying to do remediation, like introducing measures and bringing equipment to help clean up West Tower and its surrounding area, West Tower residents and their lawyers apparently remain unconvinced.

Their lawyers have been in confrontational stance and have been continuing their media campaign that makes some a bit suspicious. While it may be the lawyers’ and the residents’ way of putting public and judicial pressure, FPIC continues on doing its moral obligation to solve the problem.