Smart: Government losing revenue from Dito’s international calls

MANILA, Philippines — Smart Communications Inc. has aired its concern that the government could be losing revenues from international calls masking as local calls made by Dito Telecommunity Corp. subscribers.

In a statement, Smart vice president for regulatory affairs Roy Ibay belied Dito’s allegation in its antitrust complaints that the telco giant prohibits Dito customers from reaching Smart numbers.

Ibay said Dito has asked for additional capacity for interconnectivity by filing a petition before the National Telecommunications Commission (NTC), to which the regulator has yet to act on.

However, Ibay requested Dito to first eliminate its users who connect international calls to Smart subscribers using local rates. He said Smart would only cooperate with Dito in its bid for additional capacity if it agrees to compensate in the event that the fraudulent calls persist.

“Smart and Dito have an existing interconnection agreement—which Smart continues to honor. Dito is now requesting for additional capacity, and has raised this via petition to the NTC, where it is pending,” Ibay said.

“Simply put, Dito has failed to prevent its network from being misused for fraud, with Dito SIMs masking international calls as domestic, resulting in huge monetary losses for Smart,” he said.

Ibay said the illegal bypass committed by Dito impacts government collections as well, as it prevents authorities from collecting the corresponding taxes from international voice traffic.

“It is a disturbing development that while Smart continues to interconnect with Dito despite these outstanding issues and while we are still negotiating with Dito on a bypass agreement, Dito now attempts to avoid liability over these fraudulent international calls by filing a baseless complaint with the PCC [Philippine Competition Commission] accusing Smart of anti-competitive behavior,” Ibay said.

“Smart reiterates its willingness to grant Dito’s request for capacity augmentation, provided that it sign an agreement to compensate Smart fairly in the event that such fraudulent calls continue to proliferate. Smart cannot allow its interconnection arrangement with Dito to perpetuate fraud,” he said.

In response, Dito chief administrative officer Adel Tamano said the telco, owned by Davao-based businessman Dennis Uy and backed by China, has taken steps to minimize these fraudulent calls, but has vowed to pursue its antitrust charges against Smart and Globe Telecom Inc.

Also, Globe yesterday said Dito’s debt to the telco giant increases by P2.5 million every day that the new entrant chooses to ignore the compensation that it has to settle.

According to Globe, Dito owes Globe at least P622 million in penalties covering fraudulent calls that come from Dito’s network and pass through Globe’s signal.