Globe opposes PLDT-Digitel merger

Sunday, May 15, 2011

GLOBE Telecom on Friday reiterated its opposition to Philippine Long Distance Telephone Company’s (PLDT) acquisition of Gokongwei-owned Digital Telecommunications Philippines Inc. (Digitel).

Globe is asking regulators to “level the playing field” by looking into redistributing the communications frequencies evenly among competing telecommunications companies and aggressively implementing interconnection between telecommunications service providers.

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Speaking before Visayas journalists, Globe Telecom legal counsel Rodolfo Salalima said they are opposing the merger of PLDT and Digitel to protect consumers.

“We are not talking about self-interest here. We are advocating pro-consumerism and free market competition,” Salalima said in the press conference.

He said a level playing field in the market will result in free market competition and informed choice among consumers.

The deal, which is still pending review, would give PLDT a 70 percent share of the local mobile telecommunications industry, leaving Globe with just 30 percent. In the cellular service, Globe’s frequency acquired stood at 10 megahertz (MHz) while PLDT now has 45 MHz.

The cellular frequency ratio now stands at 1:3.5 in favor of PLDT, with 60 million subscribers as opposed to Globe’s 26.5 million users.

Salalima warned that if the merger will be approved, there would be no more free market competition and the country would revert to the old monopoly in the telecommunications industry.

Salalima said that the National Telecommunications Commission should consider

conditions like frequency distribution, leveling of playing field and interconnection.
“How can we continue to improve our services and compete fairly if there is no equal distribution of frequency?” Salalima said. He said telecommunications companies can’t maximize or put additional services with limited spectrum allocation.

He said that of the 45 MHz of PLDT, about 23 MHz should be waived and distributed among other players in the market.

Globe has already sent two letters to the NTC saying the acquisition by PLDT of Digitel undermines the foundation of Republic Act 7925, which liberalized the telecommunications industry in the country.

The company also sent another letter dated May 3 proposing remedial measures NTC can do on frequency assignments.

Aside from appealing to the NTC, Salalima said Globe will also ask government to enact a new anti-trust law and encourage lawmakers to pass new laws to strengthen and give more teeth to the current anti-trust laws in the country.

The company is also asking for the promotion of interconnection between telecommunications service providers.

Globe is also recommending the implementation of an official domestic IP (Internet protocol) peering policy for the public good. The company said it can help improve Onternet service quality and lower access costs for consumers.