Deadline set for rival telcos to settle call-promo issue

By DARWIN G. AMOJELAR, The Manila Times Reporter

The National Telecommunications Commission has given rival telecommunications companies two weeks to resolve issues regarding a promotional call-rate offered by market leader Philippine Long Distance Telephone Co.

"If there is no agreement, complainants can file an administrative case against PLDT, whether we will issue a cease and disease order or not," Ronald O. Solis, NTC chief, said.

Citing the representations made by Innove Communications Inc., Globe Telecom Inc. and Sun Cellular, Solis said PLDT’s rivals claim the telco’s offer is unrealistic.

He said PLDT set a benchmark whereby access rates are supposed to go down if rivals achieve a volume traffic of 15 million minutes.

Approval of the PLDT promo, Solis said, depended on the telco offering preferential rates to other carriers that would seek inclusion in the promo.

PLDT’s rivals said the market leader’s P10-per-call promo, which allows its landline subscribers to call subscribers of unit Smart Communications Inc. at a discount, is "cut-throat competition that would lead to a monopoly.

"We feel together with Sun Cellular, that [the PLDT promo] is cut-throat and anticompetitive," Froilan Castelo, Globe assistant vice president for corporate and regulatory affairs, told reporters following an NTC hearing last week.

Castelo noted that the PLDT P10-per-10-minutes promo cannot be sustained with the existing P3 to P4 charge the market leader imposes on rivals. "How can you earn for a P10 per 10 minutes call [if you’re supposed to pay] P4 a minute [using] a mobile phone," he pointed out.

He noted that Globe pays PLDT a P3 to P4 access charge a minute. "They might [be] subsidizing each other. [It is] bad for the industry, cut-throat is essentially an evil in any industry and in fact is illegal," Castelo said.

"The purpose of cut-throat [competition] is you are operating at a low cost in order to kill competition. Cut-throat competition would lead to [a] monopoly, [which] is worse," he added.

Castelo said Globe is willing to sit down with PLDT, but the market leader should disclose the access charges and settlement arrangement.

Bill Pamintuan, Digitel Mobile Philippines Inc. legal counsel, said PLDT’s promo renders other telcos unprofitable.

Pamintuan added that Sun Cellular is willing to interconnect if PLDT will disclose the terms of reference of its promo.

"Digitel will participate in the P10 unlimited [promo] only if access rates are reasonable," he said, without specifying what amount would be reasonable.

Ongpin telco increases capital

Connectivity Unlimited Resources Enterprise Inc. (CURE) has raised its paid-in capital as required by the National Telecommunications Commission in line with its 3G (third-generation) technology operation.

In a letter to NTC dated January 27, Eric O. Recto, CURE president, said the company’s paid-in capital was increased to P451.442 million, from P119.302 as of end 2004.

Recto added that the money was raised from the company’s shareholders.

Under the NTC memorandum order, CURE shall be required to increase its paid-in capital not later than thirty days from the date of assignment of the frequency.

"With this increase in paid capital, CURE has fulfilled all the requirements in accordance with its award of the 3G frequency," Recto said.

CURE, a company controlled by former trade minister Roberto Ongpin, plans to provide services within 12 months from the grant of authority to operate 3G, touted to be the next biggest thing in telecommunications as it allows much faster connection to existing wireless telephone networks and faster Internet access for the transfer of volumes of data in various forms.

In a document submitted to the NTC, the company said its capital expenditure for a five-year roll-out plan amounts to P11.55 billion: P3.95 billion in the first year, P1.93 billion in the second,P2.48 billion in the third, P1.66 billion in the fourth, and P1.85 billion in the fifth year.

The company also expects to generate an estimated P143 billion in revenues in five years.

The company also said it plans to install an initial number of 280 base transceiver stations, which will serve an initial market niche of at least 200,000 subscribers in designated areas for the first 12 months of operations from grant of authority.

Alvin Geli, CURE chairman, said the company committed to cover 95 percent of the provincial cities and municipalities and 90 percent of chartered cities.

The commission earlier gave CURE a score of 20.5, making it the fourth applicant to be awarded the 3G license, trailing Smart Communications Inc. with a perfect score of 30; Globe Telecommunication Inc., 29; and Digitel Mobile Philippines Inc., 28.

Other applicants that failed to secure a license were the Lopez family-led Bayan Telecommunication Inc., Multimedia Telephony Inc. and Pacific Wireless Inc.