Finding true competition

It seems the newly-formed Philippine Competition Commission will have the recently clinched joint acquisition of San Miguel Corp.’s telecommunications assets by both Philippine Long Distance Telephone Co. and Globe Telecommunications as a first test case.

Even with the absence of any filed protests on the buyout by the telecommunications duopoly, the PCC is taking it upon itself to peruse the deal “in view of the importance of this transaction to the public interest.”

Well and good. But the PCC must also remember that the interest of the public is not just confined to questions of impropriety in corporate acquisitions or mergers, but also in terms of business’ ability to deliver the best services and products to the public.

In the case of the P69.1 billion buyout of SMC’s prized 700 megahertz (MHz) spectrum by both PLDT and Globe, the two companies now share a resource that will hopefully improve their services and lower prices for consumers.

But it doesn’t mean outright that they are colluding. Far from it, the competitive environment remains as lively as ever. As most consumers are aware, Globe and its mass market brand Touch Mobile are fiercely competing against PLDT’s Smart, Sun and Talk ‘N Text in the mobile phone service sector.

This competition goes beyond serving mobile phone users, spilling over to to data servicing, broadband connection, serving the needs of big customers, and even as conduits for money transfer transactions.

Notorious in speed and rates

Sadly, though, major obstacles to improving the efficiency of the telecommunications industry, even during the years when there were more than two players, have remained. This has made the Philippines a notorious country for poor internet services and high rates.

Our country continues to have one of the slowest speeds of connection, and while the rest of the world is already talking about 5G, we are still grappling with how to make 4G or LTE available to more people at a price that would be affordable.

The same holds true for cost. The Philippines has one of the highest cost of wireless connectivity, even during the time when there were other players in the industry that were undercutting the prices set by Smart and Globe, the two undisputed market leaders.

Lack of ‘competition’

In a sense, having only two dominant players in the industry is a deterrent to “competition.” With PLDT and Globe as the two companies that own extensive telecommunications infrastructure backbones, small players and new entrants are already at a disadvantage since they have to pass through any of these two major data highways.

But that is only one side of the equation. The other reason why new competitors fail to survive, other than PLDT and Globe, is the high cost of getting a congressional franchise and permits, as well as the extra costs of setting up towers and other lines in local government territory.

The lack of interconnection between PLDT and Globe used to be a big problem since this was an added cost for consumers that wanted to get through to a competitor line. But this should be history after the two companies recently signed a long-overdue internet protocol peering arrangement.

PLDT is also working for local peering that will allow information caches from Google, Microsoft, Facebook and YouTube that can be stored in the Philippines, therefore allowing Filipinos to access internet-based information faster.

There are other innovations introduced to reduce the cost of operating in our archipelagic setting and highly politicized local government environment, and these include sharing of towers and other similar conduits.

Ultimately, the responsibility for this lies with the National Telecommunications Commission, to find solutions to the high cost and slow speed, as well as the regulation of profits.

The PCC has its role of reviewing the ethics of the sale of SMC assets to PLDT and Globe, but please let this not become a stumbling block for delaying the access to the 700 MHz spectrum that promises to improve internet speeds in the country and reduce rates.

ABS-CBN derails CWBL launch

An unexpected last minute action by ABS-CBN to withdraw their commitment to provide television coverage of CWBL games derailed the preparation for the launch of a league that will feature regional competitions. CWBL was conceptualized about two years ago during a presentation at the office of Chairman Gabby Lopez.

The ABS-CBN chairman then indicated an interest in setting up a commercial league that will feature, thru nationwide television coverage, regional competitions that will help promote and give exposure to local talents particularly those who have completed collegiate playing years but are not given broad exposure as their colleagues playing at NCAA and UAAP leagues.

Up until July 7, staff from the network production unit were in contact with participating teams, scheduling video shots and interviews of team players and coaching staff in preparation for the target opening date of Aug. 7. The following day, July 8, March Ventosa and Dino Jacinto Laurena delivered the bad news to CWBL officials.

“Citing alleged financial reasons, ABS-CBN informed CWBL this afternoon (July 8) of the withdrawal of television coverage of CWBL games,” announced Coach Joe Lipa, CWBL vice-president for basketball operations, on social media.

“We had no sense of foreboding or even an inkling of this unfortunate turn of events as in fact as late as yesterday (July 7), the teams were in communication with ABS-CBN staff on pertinent information on the participating teams,” added Coach Joe.

The last minute – and totally unexpected – decision of ABS-CBN, with barely a month from the scheduled opening date, compelled Coach Joe to call each team owner to express regrets.

He also extended his gratitude to the team owners and managers for their undivided cooperation in willingly and zealously devoting to the project in terms of setting up and organizing their respective teams.

The teams that committed to participate are: Davao Thunders (Flying V), General Santos City (Senator Pacquiao’s group of companies), Cebu City (Lhuillier companies), Bogo City (J. Soberano of Landmaster), Malolos (Mighty Athletic Apparels), and Laguna (Celso O. Mercado of Power Serve Inc.).

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