NTC starts review of PLDT, Digitel merger

By Vernadette Joven (philstar.com)

An official of the National Telecommunications Commission (NTC) said today that the agency is taking into consideration the position paper submitted by Globe Telecom on the merger announcement made by PLDT and Digitel.

In a phone interview with Philstar.com, NTC commissioner Gamaliel Cordoba said that they already began the review of the merger and will consider Globe’s position paper as an input and part of the review.

“I already read the letter and we at the NTC together with the Department of Justice and the economic team are already studying the PLDT-Digitel deal, as mandated by President Aquino,” Cordoba said.

The NTC official, meanwhile, asked for patience from the stakeholders because it would take some time before they can issue a decision on the controversial merger.

He said they have to take into consideration a lot of factors coming from different business industries that would be affected by the merger.

Two weeks ago, during the field training and live firing exercises for Balikatan 2011 in Nueva Ecija, President Benigno Aquino III said he would order NTC, the Department of Justice and his economic team to study the merger thoroughly.

“We want to ensure that there is a level playing field,” President Aquino said.

In its position paper, Globe cited threats to free competition and urged the NTC to act within its legal mandate to enforce and implement the Public Telecommunications Policy Act.

“If they (NTC) must approve the deal, do so but there are rules to follow which is already being commonly practiced in other countries,” said Atty. Rodolfo Salalima, chief legal counsel of Globe Telecom.

Salalima added that the NTC should no longer wait for PLDT to submit documents pertaining to the merger to determine whether it breached the clause of free competition.

He said that the NTC should also be able to clear the frequency allocation issue and whether the dominant carrier should return part of its frequency back to the government.

The PLDT Group, which already filed the acquisition deal last week, remains optimistic that they will be able to obtain the necessary approval before the deadline they set for the merger by the end of June.

Atty. Ray Espinosa, PLDT head of regulatory affairs and policy, calls the issues raised by Globe as a regulatory blackmail to gain leverage and exact concessions from PLDT, through NTC.

“Globe speaks of monopoly even as its controlling shareholder, have institutionalized combinations in restraint of trade, which is illegal,” Espinosa said.

Espinosa said that the issue on frequency allocation should focus on the efficiency of frequency utilization and subscriber base/usage, not on the network infrastructure, which is dependent on investment.

He added that they even have pending requests from NTC for more frequency allocation to serve more subscribers since the company has already fully utilized the frequency allocated to them.

Telcos get reprieve from new ‘load’ rule

REGULATORS YESTERDAY suspended the implementation of a section in a new memorandum circular extending the validity of prepaid mobile phone airtime credits, saying elecommunication providers need more time in developing software needed to comply with new rules.

Ruel V. Canobas, head of the National Telecommunications Commission (NTC), told reporters Section 4 of the circular was suspended until further notice due to telcos’ lack of preparation.

The provision states that "for each new load that is purchased, the amount of the unused loads earlier purchased that are still within the validity period shall be added to and accumulate to the new load. The new minimum validity or expiry period shall be based on the sum of the new load plus the unused load."

But Mr. Canobas clarified that the circular extending the expiration of mobile phone "loads" will still take effect on July 19.

Ramon R. Isberto, spokesman for Smart Communications, Inc., said programming changes required to comply with the guidelines may take several months.

Globe Telecom, Inc.’s regulatory affairs chief Froilan M. Castelo agreed, explaining: "[Our suppliers] said development of software will take two to four months plus the testing period." Globe Telecom will follow the old setup or the "roll forward rule," wherein the validity of the remaining prepaid credit follows that of new credits loaded if it is longer.

Digital Telecommunication Phils., Inc., echoed Globe Telecom’s position. "We are asking NTC if our current setup could be considered as compliance already since it is almost the same as the proposed guideline," said William S. Pamintuan, vice-president for legal affairs.

The new circular states that loads valued at P10 or lower are valid for three days. For loads worth P10 to P50, the validity period is 15 days; P50-P100, 30 days; P100-P150, 45 days; P150-P250, 60 days; P250-P300, 75 days; and more than P300, 120 days. — Jeremiah F. de Guzman

Sun seeks stronger NTC action vs. PT&T

SUN CELLULAR of Digital Telecommunications Phils. Inc. (Digitel) reported to the National Telecommunications Commission (NTC) that Philippine Telegraph and Telephone Corp. (PT&T) has defied an order the regulator issued, preventing PT&T from offering various telecommunication services.

In a letter filed with the NTC, William S. Pamintuan, Digitel’s senior vice president for legal services, said PT&T’s actions have led to interference problems in about 70 Digitel sites between Bulacan and Las Piñas.

“The interference has resulted in a degraded network quality,” Pamintuan said.

“We have learned that this Commission has already issued a cease and desist order against PT&T, but until now PT&T has continuously defied said order of [NTC],” he said.

Pamintuan asked the NTC to “issue anew a cease and desist order against PT&T.”

Earlier, Globe Telecom Inc. filed a similar complaint against PT&T, which allegedly had been using frequencies allocated to the Ayala-led telco’s 3G (third-generation) technology service.
--Darwin G. Amojelar - Manila Times

Digitel moves to stop PLDT’s expansion plan

DIGITAL Telecommunications Philippines Inc. (Digitel) wants the National Telecommunications Commission to deny the application of the Philippine Long Distance Telephone Co. for expansion in areas not covered by its license.

Digitel also questions the legal capacity of PLDT to expand its services to the entire country, saying it is foreign owned.

In a filing with NTC, Myla M. Matic, Digitel legal counsel, said the entry of the PLDT in areas already served by numerous authorized service providers and entities would result in a ruinous competition prejudicial to minor and budding players in the industry.

The PLDT had requested the regulator that it be issued a certificate of public convenience and necessity, which will allow the company to establish, install, operate and maintain telecommunications services in areas not yet covered by its permit.

“PLDT would naturally be imposing its dominance over these players considering the extent of coverage it desires to serve through the proposed services, a fact which contravenes the very basic purpose of the law to level the playing field for industry players,” Matic said in a statement.

She said the PLDT’s expansion would be a waste of valuable resources as it will duplicate the services already being offered by authorized carriers and entities in the proposed areas.

“It is worthy to take a look at the legal capacity of the PLDT to apply for the proposed services in view of the recent issue that it is a foreign-owned corporation, for more than 60 percent of its outstanding common stocks is owned by foreign interests,” Matic said.

“This is a violation of the 60-40 requirement on foreign ownership of local utilities. This is clearly a violation of the 1987 Constitution and Republic Act 7042 or the Foreign Investments Act of 1991 since with this current set up, the PLDT would allow foreigners to exercise control and management of its affairs and provision of public service which is only granted to Filipino owned corporations,” she added.
--Darwin G. Amojelar - Manila Times