PCC flags telco on post-bidding competition issues

Even if the Philippine Competition Commission (PCC) has cleared competition issues prior to the bidding of the third telco player, there are still regulatory reforms the Department of Information, Communication and Technology (DICT) has to address post bidding.

PCC Commissioner Johannes Bernabe explained to reporters that there are lots of regulatory reforms that DICT has committed to pursue including common tower, unused frequency and open access/roaming issues.

For one, Bernabe noted there are till unused frequencies of National Grid Corp. of the Philippines that should be made available to all telcos but was not included in the bidding TOR. This unused NGCP frequency should not just be made available to the third telco but to the existing two telcos, as well, through a circular that should be issued by the DICT.

Another competition post bidding is the open access, including roaming, because the frequencies for the third telco is essentially about 90 mhz only but PLDT has 425 mhz and Globe has 320 mhz.

“So, there is a big disparity,” said Bernabe as he emphasized that the third telco has no allocation for 2-3G frequencies or the voice and text only market.

“This means you have to allow them to piggy back on the frequencies of the two existing telcos and this was also acknowledged in private discussions that they be allowed to piggy back on front terms of fair use and reasonable policy, but the ultimate long term solution is equitable allocation of frequencies,” he stressed.

Bernabe explained this is where competition principles come in because the two players hold the essential facilities and if they are not allowed to piggy back they cannot provide the proper services required of them.

At present, the third telco frequencies can only service the high-end or the smartphone users as they do not have the 2-3G, which accounts for the bulk or 40 million users.

But what the third telco is betting on the growing data market and the potential conversion of the 2-3G customers (users or feature phones only with no data capability) into data plans or smartphone users.

On the common tower cap, Bernabe said the PCC does not agree to limit it to two towers only because that would be “too limiting” since the construction of telco towers have been granted franchise by Congress. PCC believes there should be no limit on the construction of common towers and this was also the sentiment in Congress.

PCC, which is part of the oversight committee of the telco industry, is coming up with a position paper on the competition principles post third telco bidding.

The PCC has been part of the crafting of the bidding TOR for the third telco to ensure competition issues are addressed from the very start and there is no need for the competition watchdog to review the transaction after it was awarded to the winning bidder.

Its presence had resulted in the signing of an undertaking by all third telco interested parties bidders before the bidding to ensure that all competition elements and disciplines will have to be complied once the third telco player is awarded to the winning bidder. The UdennaChina Telecom consortium was named provisional third telco after the bidding held last week. Udenna is owned by Davao-based businessman Dennis Uy, a friend of President Duterte.