PLDT opposes frequency cuts, says allotments based on subscriber base, efficiency

MANILA, Philippines – Listed Philippine Long Distance Telephone Co. (PLDT) has once again accused its rival Globe Telecom Inc. of trying to deceive the public on several issues that aim to nullify the former’s takeover of Digitel Telecommunications Philippines Inc.

At the resumption of the National Telecommunications Commission’s (NTC) hearings on the Digitel takeover, PLDT said Globe’s claims on interconnection and frequency allocation were misleading and did not show the real facts of the issues.

Globe is currently the leading opposing party against the takeover of Digitel, which will result in PLDT having a market share of 70 percent.

On Friday, Globe Telecom engineer Emmanuel Estrada in an affidavit argued that PLDT would end up with more frequency that it would need to carry out its operations and that the “excess” frequencies must be reviewed and rationalized to protect consumers and ensure a level playing field among the competitors.

Globe has said the PLDT group should be stripped of some of its frequencies to give smaller companies the chance to gain market share. Globe said unless this was done, the PLDT group would have a virtual monopoly in the local telecom sector.

“But PLDT’s share of frequency is commensurate to its number of subscribers,” PLDT regulatory affairs head Ray C. Espinosa said.

He pointed out that Smart had a total of 112.5 megahertz (MHz), Globe has 90 MHz, and Sun 42.5 MHz. “This is not ‘disproportionate’, given the respective subscriber bases of the three operators,” Espinosa said.

As of the end of 2010, Smart had 45.6 million subscribers, Globe had 26.5 million, and Digitel’s mobile brand Sun had 14 million.

According to Espinosa, Smart is currently the most efficient telecom firm in the use of radio frequencies. PLDT has about 406,000 users per MHz while Globe has 249,000 users per MHz. Sun, for its part, has 329,000 users for each MHz.

“The frequencies assigned to PLDT/Smart are being fully utilized in order to serve its large customer base,” he said.

Espinosa noted that under law, state-owned radio frequencies used in delivering mobile phone services should be awarded to service providers “who will use it efficiently and effectively to meet public demand for telecommunications service.”

Once the PLDT-Digitel merger is completed, the combined group will have 385,000 subscribers per MHz.

“The efficiency of frequency utilization is computed by dividing the number of subscribers of an operator by the number of frequency MHz that it has been assigned,” Espinosa said.

““The principal obligation of an operator assigned radio spectrum is to use that scarce resource as efficiently as possible in order to provide the public communications services, and we are the most efficient operator in the use of frequencies,” Espinosa said.

He added that under the NTC’s own rules, a company could only be stripped of its frequencies if it failed to pay regulatory fees or if it failed to use its assigned frequencies.