MANILA, Philippines—Lawmakers have cast a wary eye on the purchase by Philippine Long DistanceTelephone Co. of a 51.55 percent share in Digital Communication Philippines Inc., especially on its impact on the lucrative mobile phone business.
“I do not, in principle, object to PLDT’s business expansion knowing the reputation and standards set by its leadership in the corporate world. However, if this purchase is tantamount to killing the competition to the detriment of the whole telecom industry and the consuming public, then I may have some reservations,’’ said Quezon City Rep. Winston Castelo.
On Tuesday, PLDT announced that it was paying P69.2 billion for a majority stake in Digitel which in turn would get a 12.8 percent stake or one board seat in PLDT. The deal is expected to give Smart a commanding 67 percent share of the telecommunications market. The purchase is expected to affect Sun’s low-cost strategy, which has forced Smart and number two player Globe Telecom to cut their margins since it started mobile services in 2003. As of 2010, Sun had 14 million subscribers or a third of PLDT’s 45.6 million cell phone subscribers.
“If this PLDT buyout threatens the economy, puts the interest of the general public in peril, and intimidates an otherwise competitive environment in the telecombusiness, then perhaps it must be evaluated,” said Castelo.
Negros Occidental Rep. Alfredo Benitez said PLDT’s purchase of Digitel – which would combine the number one (Smart) and number three (Sun) mobile phone service providers in the country – has made it more urgent for Congress to pass an anti-trust law to keep markets competitive and prevent the formation of cartels or monopolies that could abuse consumer interest. “We have to rush the enactment of an anti-trust law to determine if the purchase is meant to curtail competition,’’ said Benitez in a text message.
Eastern Samar Rep. Benjamin Evardone was worried that chronic consumer complaints on poor quality of service and the players’ insensitivity to consumer complaints would only worsen with the industry reduced to a two-way from a three-cornered fight. “We hope that the acquisition by Smart of Sun will enhance consumer services even as we have strong reservations and apprehensions that services of telecommunications might deteriorate. As it is, there are already mounting consumer complaints such as overbilling and dropped calls that are not being addressed by the telcos. This should prod the National Telecommunications Commission to intensify its monitoring over the industry players to prevent abuses,’’ said Evardone.
Bayan Muna Rep. Teodoro Casiño expressed concern that Sun Cellular's innovative strategies that helped reduce the cost of services—like unlimited call and text plans and lower rates—would be reversed. “The public has to be wary of potential monopoly practices resulting from this takeover,’’ said Casino.
Castelo said that Congress should look into the terms of the buy-out considering that PLDT practically bought a big market share by “killing a strong competitor.’’
“I still believe that competition, not monopoly, will drive prices in the markets at rates beneficial and affordable to the general public. Government policy is always of the nature of preventing ‘empire building in various market opportunities’ to be virtually dictated by business monopolies,” said Castelo.
well, lets hope and pray that this politicians are not jst good in talking! or else?we knw now who to vote the next election!!! PEOPLE PEOPLE PEOPLE think abt the filipino pe0ple! and whats good for each and everyone of us!
ReplyDelete