The Senate may have been taken for a ride in the recent hearing on the P70-billion PLDT-Digitel deal, but Senate President Juan Ponce Enrile (a.k.a. JPE), who at 87 years of age may be the great grandfather of many public officials here, has a bright idea.
And that is, the government should award the use of radio frequency, such as those for 3G mobile devices, to the highest bidder, instead of just giving away for free such scant resources to the telecommunications giants.
From what I gathered, the National Telecommunications Commission, or the NTC, which is the quasi-judicial body regulating the entire gamut of the telecommunications sector, merely charges a one-time fee for the radio frequency.
But just exactly how much the government earned from the use of the limited bands of 3G radio frequencies, is still anybody’s guess. It is top secret. Nobody in the NTC and the telecom business is talking.
One figure that surfaced was a monthly fee of P65 million.
Now PLDT-Smart reported an income of almost P40 billion in 2010. It is also said in the stock market that the wireless business of Smart actually accounted for more than P30 billion of that.
As for Globe, its income dropped to less than P10 billion last year, from almost P13 billion in 2009.
For newcomer Digitel-Sun, the business has been a losing proposition for the Gokongwei group. Digitel made a little money last year, with income at only less than P500 million.
Still, the point is that the telecom industry is raking it in, being the most profitable sector in this country for more than a decade now. And the government charges them, what, some coffee money for the use of the valuable radio frequency.
As JPE pointed out, other countries earn billions of dollars by conducting public bidding for the use of those 3G bands, which are actually what the PLDT-Smart and Globe fight is all about, even involving the Senate in their mess.
I am certain that the guys down here in my barangay will love JPE for his suggestion. It is about time, too!
JPE actually brought up the idea also during the Senate hearing on the controversial PLDT-Smart acquisition of Digitel-Sun. The Senate apparently called for the hearing upon the insistence of Globe that the deal was against the law.
Based on reports, Sen. Joker Arroyo even took the cue to call for the hearing, mainly from noises made by Globe about the need for congressional approval of the acquisition.
But Globe turned around during the hearing, its lawyers saying that the company was not questioning the legality of the deal.
It was just that, according to the lawyers, Globe wanted the government, through the NTC, to impose conditions on the transaction.
The Globe lawyers changed their tune, apparently because Globe itself had an exact same deal when it acquired Isla Communications some 10 years ago.
Pointing out that Globe acquisition during the hearing was Sen. Jinggoy Estrada, the son of former President Joseph Estrada, in whose term MVP (PLDT big boss Manuel V. Pangilinan) took over PLDT from the group of long-time PLDT chair Antonio (Tonyboy) Cojuangco, who in turn is the cousin of our present leader Benigno Simeon (a.k.a BS), to whom Globe directly communicated to ask for some favors, among them that the NTC give away 3G bands to Globe.
How significant those relationships are in this current battle involving the competing giants PLDT and Globe, nobody could as yet say.
But word had it sometime ago that MVP and Tonyboy had a falling out regarding their deal in PLDT, particularly over the remaining interests in the firm that were held by the government through the PCGG.
Anyway, the young Estrada pointed out that, for its Isla acquisition, Globe merely sought the approval of the NTC, but not that of Congress.
And that was probably the reason why the Globe lawyers decided to change their attack strategy, from the legality angle to public interest.
Earlier, reports quoting the Globe lawyers said that the PLDT-Digitel deal would tilt the balance in the distribution of the 3G bands in favor of the combined Smart and Sun, which would eventually kill Globe, and thus leave the public with a monopoly in the wireless service business.
Their solution: Well, the government can always take back some 3G bands from PLDT and give them to Globe.
In the same Senate hearing, the same argument flew back at the faces of the Globe lawyers. It turned out that Globe itself had wanted to acquire Digitel.
The Gokongwei group’s heir apparent Lance Gokongwei, who had a double major in Harvard University, getting honors in both, told the senators that he had a meeting with the brothers Zobel, namely, Jaime Augusto and Fernando, who are the recognized heads of the Ayala family.
The Globe lawyers called the meeting only “informal talks.” Sure, and these “informal talks” took several meetings in all of four months. The only thing that the Ayala and the Gokongwei groups did not agree on, well, was the price.
Here is a little quip from JPE: “This is a situation where the loser is complaining about the winner.” Right on! Down here, we call it simply as whining.