MERGED: Smart buys Digitel (Sun Cellular)

[ong76win2]

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Basin nahadlok siya na in the long run naa na monopoly sa telco ang SMart.

Mao jud. At least he is also concerned not just for short term but for the long term na ang PLDT/ Smart na ang mu dictate sa pricing. Ang luoy ani kung mahitabo is the customers/ subscribers.

[ong76win2]

PLDT-Digitel deal: A step forward or an antitrust problem?
By Alexander Villafania, loQal.ph

QUEZON CITY, METRO MANILA – The P74 billion buyout of Digital Telecommunications (Digitel) by the Philippine Long Distance Telephone Company (PLDT) has raised a lot of questions from different groups, particularly from consumer rights and the legislative sector.

Many have questioned if the purchase will create a duopoly as only two national telecommunications or telecom providers will exist, and if it will force consumers to be beholden to the sudden changes in service and pricing.

In the recent public forum on the PLDT-Digitel deal, consumer groups, legal experts, economists, legislators, and even members of the telecom took the liberty of airing their sides to the matter, which is expected to remain a hot topic in the coming days.

Al Alegre, executive director of the Foundation for Media Alternatives (FMA), one of the groups that organized the forum, stressed on the timeliness of the discussion as it involved a major utility service.

Alegre cited that over 90 percent of all Filipinos are already using at least one or more of the services being offered by PLDT.

On its own, PLDT is the biggest telecom provider in the Philippines supplying nearly half of all telecom services in the country. Alegre stressed that such an acquisition of another telecom firm puts a huge question mark on whether these corporations would serve the public’s best interest.

“It’s only fair that we discuss matters that refer to consumer rights because these events that happened also put into question the viability of fair competition in the Philippines,” Alegre said.

Third player

Prior to the March 29 announcement, Digitel, which fully owned mobile telecom firm Sun Cellular, was considered the third major player in this sector, with at least 14 million subscribers. Second is Globe Telecom with 26.5 million.

PLDT’s Smart Communications had at least 45 million subscribers, more than the combined mobile subscriber total of Globe Telecom and Sun Cellular.

However, Sun Cellular became a tipping point in the domestic mobile telecommunication services as it offered time-bound unlimited SMS and voice calls, which forced the two other major carriers to start introducing similar services on a promotional basis (later becoming part of several post-paid packages).

Erwin Alampay, a research fellow of the Asia Pacific ICT policy think-tank LIRNE Asia, noted that the presence of several players in any given industry creates a model for best practices that serve the public better.

Showing some slides on how Sun’s unlimited services increased the uptake of mobile phone subscribers, Alampay stressed that competition allows for a much higher growth potential for any industry.

“It was necessary for another player like Sun Cellular because it forced other players in the same business to offer better services, which in turn drives higher margins,” Alampay said.

'Duopoly'

A study by independent researcher Mary Grace Mirandilla-Santos showed that acquisitions are nothing new in the telecom business, noting PLDT’s acquisition of Pilipino Telephone Corporation (Piltel) and Globe’s purchase of Islacom.

Tonyo Cruz, consumer rights advocate and head of the online group TXTPower, warned that a “duopoly” is in play especially after the heated debate over broadband data cap that would have scaled down the amount of data that people upload or download in their Internet usage.

Cruz, a staunch critic of alleged unfair practices of telecommunications firms, claimed that there is no government inspection or assessment of existing network infrastructure that would ensure that subscribers are given at par services. He pointed out that data caps, which Globe had recently implemented, hide those network problems that the government fails to monitor.

Without monitoring systems in place, Cruz said consumers are at the behest of the major providers in the Philippines, in this case, PLDT and Globe.

“We still suffer from bad service, below par customer service, iron-clad contracts, interconnection fees, unstable and unreliable calls,” he said.

Proof of antitrust

On the legal side, antitrust issues were also raised. In an economy where profitability also means improving services due to the presence of a competing brand, one has to wonder if there are problems that could put quality of service at a lower level.

University of the Philippines School of Economics Professor Raul Fabella simply said that the protection of consumer rights is also established by protecting the right to compete in the market.

However, it is still rather difficult to prove abuse of market power even at any stage in the economy as there are no salient features on should be deemed abusive from a service standpoint.

In fact, Fabella stressed that having a single major player is not necessarily evil but could rather be a technical advantage. If a service remains good or even improved after a major acquisition or merger, then there is no actual abuse.

However, it would be necessary for competition to be present to further drive improvements in services.

Department of Justice Assistant Secretary Atty. Geronimo Sy said that the necessity of an antitrust law is muted largely because there are already existing laws that grant the review of allegations of antitrust.

He said the most powerful would be the Philippine Constitution, specifically Article 12, which discusses unfair competition.

“Laws against unfair competition is also cascaded down to existing laws and chargers, including the National Telecommunications Charter, the laws of the Department of Trade and Industry, and the Department of Justice. These laws cover all industries and where cartels exist,” said Sy.

Like Fabella, Sy also said that it is hard to prove abuse and in the case of the PLDT-Digitel deal, he stressed that PLDT will just be looking at a means of recouping investments.

“If it stretches for 15 to 20 years [for return of investments] then it’s fine. But if the company changes its plans then we’ll have to look into it. We have to attest whether the company will behave in the best public interest or change in the course of time.”

Sy added that while consumer groups such as TXTPower have no actual figures to back up its arguments against unfair practices of the telecommunications providers, it is still necessary to look at consumer complaints that need to be addressed if real progress is to be made in offering services.

Government approval

Legally, PLDT and Digitel are still obliged to secure an approval from both Senate and the House of Representatives for a franchise, as well as the NTC. This is a virtue set by Republic Act 7925 or the Telecommunications Act. As such, both companies also have to explain the merits of the acquisition.

Atty. Rodolfo Salalima, head of the Philippine Chamber of Telecommunications Operators (PCTO), gave a long legal explanation on the PLDT-Digitel deal, though he simply said that details are yet to emerge. However, he stressed that prior approval by Congress and the NTC is needed for the acquisition to push through.

He also stressed that the public, if it wants to influence the direction of the acquisition, must attend public hearings that will be conducted by Congress.

“Attend those hearings if you want your suggestions to be heard and put in place.”

During the public discussion, Smart Communications Head for Public Affairs Ramon Isberto chimed in on the heated discussion of Smart’s parent company’s recent purchase.

Repeating what PLDT Chairman Manuel V. Pangilinan assured, Isberto said that they will keep Sun Cellular’s unlimited offers intact and even make them better.

He also corrected perceptions that their company continues to profit from existing services. In fact, competition in the telecom space is no longer with other similar firms but from those offering value-added services that run through their networks.

He cited companies like Skype and Yahoo! that have voice-over-IP or VoIP services that compete with their existing voice services.

“The more we expand, the more we create challengers to our service. And yet we still pursue even bigger and better services. Competition comes in many forms and we already know where they will come from,” said Isberto.

As a final point, Isberto stressed that all their investments have the best interest of the public in mind and also to keep their operations intact. “If you don’t trust our intentions, please, trust our intelligence,” he said.

Source: PLDT-Digitel deal: A step forward or an antitrust problem? - Yahoo!

Please share your comments and reactions. Thank you.

[bukiluki]

so hello tm or globe,wajud ayu ng smart sauna pa,kawatan kaau ug ;load...

[rjgo_1979]

intawon, PEOPLE IN CONGRESS, do something about the monopolies you fat cats.

[ong76win2]

NTC to review papers of Smart-Digitel merger deal
AMITA O. LEGASPI, GMA News
04/16/2011 | 01:00 AM

The National Telecommunications Commission (NTC) on Friday said it is still waiting to receive the transaction documents on the Philippine Long Distance Telephone Co.’s (PLDT) takeover of Digital Telecommunications Philippines (Digitel).

“We haven’t received [yet] the final document of their transaction. I think they’re still finalizing it," NTC Commissioner Gamaliel Cordoba told Malacañang reporters.

“As soon as we get it, itutuloy po namin iyong pag-aaral ng merger ng dalawang telephone companies [we will continue studying the two telephone companies’ merger deal]," Cordoba added.

PLDT, which owns cellular service provider Smart Communications Inc., belongs to a group of companies owned or controlled by leading Filipino businessman Manuel V. Pangilinan.

Digitel, which operates Sun Cellular, is in turn owned by the Gokongwei-owned JG Summit Holdings.

Last Wednesday, President Benigno Aquino III said he was studying the possible impact of the impending merger of Smart and Digitel particularly on the price of service that consumers pay for their mobile phone services. (See: Aquino concerned over impending merger of Smart, Sun)

“We want to ensure that there is a level playing field," Aquino said at the time.

Cordoba said the NTC already started the study “in cooperation… with the [administration’s] economic team."

The Department of Justice will also take part in the assessment of the merger of the Pangilinan-led and Gokongwei-led telecommunications firms, he said.

In the same press briefing, Smart spokesperson Ramon Isberto said they will maintain and continue the services of Sun Cellular and even further improve it.

“If you are currently a Sun [Cellular] subscriber, you should be happy that this transaction is taking place," Isberto said.

He also said that Smart will also improve the reach of services of Sun Cellular, known for its unlimited call and text products.

He pointed out that the objective in acquiring Digitel is to strengthen the ability of PLDT — the country’s largest telecommunications firm — to provide broadband services in larger areas of the country.

“The challenge for telcos is how to provide broadband service, expand to more areas in the country, and remain viable. The transaction gives us a glimpse of the future. And, the future of telecommunications services is broadband," Isberto said.

William Pamintuan, senior vice president for legal affairs of Digitel, agreed with Isberto, saying the transaction will allow Sun Cellular to expand the coverage of its “unlimited" services.

On the other hand, Ayala-owned Globe Telecommunications Inc. commended the Aquino administration’s efforts to review the merger of Smart and Digitel.

“Like what’s going on between the merger of US’ AT&T and T-Mobile, their government is very, very careful in studying the transaction," said Yolanda Crisanto, head of Globe’s corporate communications affairs.

“At the end of the day, we go back to the consumers. Will consumer be given a choice? Are we diminishing competitiveness in this industry?" Crisanto said.

Last March, AT&T announced it is buying T-Mobile for a whooping $39 billion in cash and stocks.—JE/JV, GMA News

Source: NTC to review papers of Smart-Digitel merger deal - Business - GMA News Online - Latest Philippine News

Please post your comments and reactions. Thank you

[ong76win2]

PLDT: Digitel deal not anti-competition
04/14/2011 | 07:51 PM

On Thursday, the Philippine Long Distance Telephone Co. (PLDT) insisted that its takeover of rival Digitel Telecommunications Philippines Inc. would be beneficial to the local telecommunications industry, and would in better services and more competitive prices for consumers.

He also downplayed fears that the PLDT-Digitel merger would hinder competition in the local telecommunications industry.

“We will keep Digitel as a separate company. This is not a merger… more importantly, we will maintain the unlimited and bucket-priced services of Sun Cellular," Pangilinan told reporters.

He assured that the PLDT group will officially set itself to developing widely accessible, high-speed Internet.

“We will make a formal commitment to the government for the benefit of consumers," Pangilinan said.

The acquisition of Digitel will help PLDT roll out broadband services to 95 percent of the country “in three years," he said.

Currently, just two-thirds of the Philippines has high-speed Internet access.

Consumer groups and lawmakers earlier voiced concerns that the PLDT-Digitel merger would allow PLDT to dictate market prices, thereby ending the “price wars" that have helped keep telecommunications services at affordable rates.

Globe pushes for gov't probe

Earlier this week, Ayala-led Globe Telecom likewise urged the government to look into the deal between its two main competitors. PLDT, after acquiring Digitel, will corner 67 percent of industry revenues. Seven out of 10 mobile users in the Philippines will also be on its network.

Globe said that regulators should consider ordering PLDT to relinquish some of its redundant frequencies following its takeover of Digitel’s operations.

However, Pangilinan countered that this should only be done in the event of a scarcity of frequencies for new players in the market —which is not the case, he asserts. “Our frequencies are enough for the subscribers we have," he said.

Review may be 'warranted'

He admitted that a state review may be “warranted" due to the size of the share-swap agreement, which is valued at P74.1 billion.

Nevertheless, Pangilinan assured the government that the market would remain competitive.

Pangilinan said that Globe itself has remained committed to competing with PLDT-Digitel.

San Miguel Corp., despite being a late entrant in the telecoms market, has likewise vowed to be a strong competitor via its subsidiary, Liberty Telecom Holdings Inc. — TJD, GMA News

Source: PLDT: Digitel deal not anti-competition - Technology - GMA News Online - Latest Philippine News

Please post your comments and reactions. Thank you.

[KageKisaki]

kawawa naman ang GLOBE. I read in the Phil Daily Inquirer na their market share went down to a third in the first quarter of the year

[ong76win2]

kawawa naman ang GLOBE. I read in the Phil Daily Inquirer na their market share went down to a third in the first quarter of the year

Globe is the most expensive then Smart is in between and lastly Sun Cellular is the cheapest.

Globe has to do more marketing if not, they would really loose subscribers. Globe is very changable in their marketing promos before. Now I don't know. Hope they are now consistent with their promos. That is why they are loosing market share.

[ong76win2]

Here is a good news regarding San Miguel going into the telecom business. Please check the link below. Thanks

https://www.istorya.net/forums/politi...-business.html

[peewee_toot]

^^at least naay laing competitor. i hope it would be a healthy competition...