Announced two months ago, the deal is currently being reviewed by National Telecommunications Commission, and is still subject to regulatory approval. Once consummated, the deal will effectively revive the duopolistic structure of the industry—with PLDT and Globe benefitting from reduced competition.
But both had been trading barbs since, with neither camp seemingly providing the full and accurate picture for appreciation of the widely speculating public.
“We are submitting the sales and purchase agreement to the NTC voluntarily to dispel malicious statements made by some parties that PLDT and Digitel have something to hide,” said PLDT.
Ayala-led Globe Telecom, the second-biggest player in the mobile industry next to PLDT-subsidiary Smart, moved to block the deal, citing the subsequent 70 percent commanding control in the wireless market would undermine the competition in the industry.
“If a single player controls 70 percent of the market, it will have so much clout, and that will kill competition,” claimed Globe.
“Globe wants to create the impression of an impending monopoly by PLDT, which is not the case. What Globe really wants is for the government to make up for their inefficiencies,” PLDT shot back.
Interestingly, the arguments coming from either camp are always laid on the pretext of enhancing consumer welfare.
“We see this transaction as having significant strategic benefits for our customers, the general public and the shareholders of both PLDT and Digitel. The investment will leverage the combined expertise of PLDT and Digitel to provide high quality and even more affordable services for fixed lines, wireless and broadband subscribers,” said PLDT.
In a position paper, Globe urged NTC to intervene by “implementing pre-emptive moves and regulations to protect the gains of Republic Act 7295, the fair and free competition in the market place and, ultimately, the public good and welfare.”
It’s as if the primary consideration of these business entities in proceeding (or blocking) the deal is for the benefit of the consuming public.
Is it?
Was it not only a couple of years ago when both Smart and Globe (earning billions for years prior to the entry of Sun Cellular) criticized and filed separate complaints to NTC, Sun Cellular’s “unlimited” and bucket-priced services? Only when NTC ruled in favor of Sun Cellular that both followed suit, making similar offers.
Sun Cellular did not drive them to oblivion, but it did eat away at their markets, and ultimately, at their bottom line. That bit of history rather makes PLDT’s and Globe’s current pronouncements of “enhanced consumer welfare”, suspect.
So far, we do know that the PLDT-Digitel deal is purely a business deal, aimed at protecting and strengthening their business interests in a mature industry with limited potential for growth.
Globe may just as well benefit from it, but will have to contend with tougher battles ahead, limiting its capability to expand its services.
But whether the public would benefit from the deal, how soon, and by how much – is yet to be established. Some say that price wars would become more intense, at least at the onset of the changed industry landscape. Others suppose otherwise.
Is it reasonable for the public to expect the costs of these telecommunications services to still go down? How affordable should they get? Aren’t they reasonable enough?
The fact that almost every Filipino man, woman, and yes, in some instances, even child, does own a cellular phone is a clear indication that mobile services are somewhat already “affordable.”
In fact, many of those belonging in the upper echelon of society own at least two or three mobile units. Traffic enforcers, bus and jeepney drivers, and many of our domestics texting while on the jobs are regular sights. Seldom would one find a public transport without at least one passenger busy chatting on his or her mobile device.
Some road accidents are even caused by the unnecessary use of such device. Perhaps the authorities would express the same interest in wanting to regulate mobile phone use, on the grounds of “guarding public welfare?”
Ultimately though and just like PLDT and Globe, the many faces of a rational Juan will only be interested in his own bottom line. What’s in it for me?
Regardless of the PLDT-Globe fray, Juan wants good services at inexpensive rates, if not free.
