National broadband only way to break telco duopoly

AFTER A stern warning from incoming President Rodrigo Duterte, the telecom duopoly of PLDT and Globe is now all-out in its massive propaganda, touting improvements in its services: PLDT and Globe were able to “peer” and fire up new cell sites and to infuse huge capital investments in a month—feats they were not able to achieve in the six years of the current Aquino regime. It’s as if they’re paying tribute to a new king.

In May 2016, competitors PLDT and Globe agreed to acquire from upcoming rival San Miguel Corp. the latter’s telecom assets and license to use the 700-megahertz spectrum. The takeover consolidates 91 percent of all assigned frequencies for mobile communications in two firms. Technically, it wipes out any aspiring competition—regardless if the newcomer has bottomless capital. Without an ample bandwidth on the radio spectrum, no one can enter to compete.

By now, it is clear to us, consumers and technicians, that the acquisition is not about improving internet speed and service reliability. It’s about expanding coverage using the new 700-MHz frequency. PLDT and Globe will be expanding their slowest internet speed offering to areas previously not reached. In the end, they will only be adding new users which will share their already frustrating internet service.

A few weeks ago, the duopoly entered into an exclusive peering agreement without including the neutral internet exchange, PHOpenIX. The inclusion could have benefited not only its subscribers but also all internet users in the country. In the final analysis, this is a move to further consolidate PLDT and Globe’s joint powers to ward off new competitors.

The duopoly, however, appears to be in a bit of disagreement. In the past month, Globe CEO Ernest Cu called for government spending to lay down internet infrastructure in unprofitable areas, while PLDT’s Manny Pangilinan wants the government to “leave business alone” to improve telco infrastructure. The contrasting positions are a duopoly deception. Globe only wants to expand its services—and, correspondingly, its revenue base—with government subsidy; while PLDT wants the freedom to do whatever it wishes without government intervention.

The National Telecommunications Commission has been “hands off” since 1995 with the passage of Republic Act No. 7925 which has effectively deregulated and privatized the telecom industry. This “hands-off” approach gave us the worst internet connection in Asia.

It is time for change.

Social media, powered by the internet, was one of the key factors that boosted the campaign of the incoming President. The succeeding administration should realize the power of affordable, accessible and reliable telecommunication services to empower the people such that they are able to participate and support government’s antidrug and anticorruption programs, and help bring government to the poor.

With PLDT and Globe consolidating their efforts against new competitors, the only viable and powerful competition that can break this is the government’s massive involvement in providing telecommunication services. It should embark on setting up a national broadband network sans the corruption and self-interest of the Arroyo regime. It should set new and measurable standards on minimum internet speeds and service reliability. Regulations should be strictly imposed with penalties that really hurt and are enforceable by government. RA 7925 should be reviewed and the telecom industry redirected toward ensuring reliable access and affordability for the public. The duopoly has been unchecked for so long such that it has been reaping huge profits for minimal services.

—MAC YANTO, deputy secretary general, Computer Professionals’ Union, secretariat@cp-union.com