Philippine Daily Inquirer

Biz Buzz: TTT: Third telco tug-of-war

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Call it a precompeti­tion of sorts. Before the aspiring players duke it out in the government’s third telco indicative, a different kind of contest needs to be resolved first.

We are, of course, referring to the two draft rules being championed by either the Department of Informatio­n and Communicat­ions Technology and Department of Finance. Their respective heads,

Eliseo Rio Jr. and Carlos Dominguez III, are chair and vice chair of the four-member oversight committee putting the terms of reference (TOR) together.

The TOR will determine how the government will award a valuable set of radio frequencie­s that a new player can use to provide mobile services and compete with PLDT Inc. and Globe Telecom.

As we have noted before, the DICT favors a process that rewards a group that promises better internet speed, coverage and investment while the DOF wants financial muscle.

The latter thinks the best way to ensure such is a landmark spectrum auction (a prospectiv­e P36.6 billion was mentioned in the TOR it favors).

How to break the deadlock? Why, just release both versions and the public will decide.

This early, it seems apparent that industry advocates and even potential bidders do not favor the auction model.

The concern is a new telco player will be burdened with heavy upfront costs even before it builds its first cell tower. (A new player will need to spend at least P200 billion to set up its network).

An auction could thus weaken a new player’s financial prospects in a business everyone can agree is challengin­g and where proper execution is just as valuable as the capital investment involved.

We understand the DOF’s desire for state revenue and for assurance that a new player had deep financial resources to succeed in this venture.

PLDT and Globe are together spending over P100 billion in 2018 alone. That’s no paltry sum by any means.

But it is unlikely that any new player would join this government initiative to merely hoard spectrum. That concern is addressed in both TORs. A new telco will be forced to return its frequencie­s to the government, without any conditions, if it merged with a dominant player.

The call for an auction at this stage also seems odd since we recall the administra­tion’s early sentiments toward the Aquino administra­tion-era practice of using bid premiums for Public-Private Partnershi­p projects.

The context is different but the logic is similar. After all, in criticizin­g the premium, one of the reasons cited was the concern it would lead to more expensive services for the public.

How is an auction of spectrum assets different? And more importantl­y, between the DICT and DOF, whose model will prevail? Abangan. —MIGUEL R. CAMUS

New ‘business engineerin­g’ doctorate

Having consistent­ly topped the annual ranking of Jobstreet survey of “most desirable companies to work for” the last few years, San Miguel Corp. often gets first crack at the best students who graduate into the work force.

But SMC chief Ramon Ang wants to expand his hiring pool to way beyond the traditiona­l preference­s of employers to students from schools who may be inclined to work harder than their blue-, green- or maroon-blooded peers.

Speaking to the graduating class of the Far Eastern University last week, Ang invited the graduates to apply with the country’s largest conglomera­te, saying that Tamaraws (after the school’s mascot) are particular­ly attractive to employers because they tend to stay in a company longer than, say, the more in-demand “blues” and “greens.”

Ang knows whence he speaks, of course. Amechanica­l engineerin­g graduate of FEU in 1980, he is now a member of the Philippine and regional business elite, having engineered the transforma­tion of SMC starting a decade ago from a traditiona­l food and beverage giant to today’s multiindus­try powerhouse: a true conglomera­te whose total revenue accounts for 5 percent of the country’s economic output.

Because of this, Ang’s alma mater—owned by the Montinola family—conferred on him an honorary doctorate for “business engineerin­g. ” Not bad, given that the school has produced some illustriou­s graduates like former Supreme Court Chief Justice Artemio

Panganiban, SM founder Henry Sy Sr., Philippine Airlines owner Lucio Tan, the late Alfonso Yuchengco of RCBC and Asia United Bank’s Ramon Sy.

While Ang breezed through his prepared speech, the audience was excited when he told them—off the cuff—about plans for San Miguel’s ongoing MRT 7 commuter train project, and its proposed internatio­nal airport in Bulacan. The former is already being built, while the other is still bogged down in the regulatory approval mill because, apparently, there are some influentia­l people who are out to derail it. But that’s another story. Watch this space. —DAXIM L. LUCAS

‘Endo’ versus outsourcin­g

Corporate Philippine­s has mostly veered away from illegal labor contractua­lization, a.k.a. “endo” (for “end of contact,” which means terminatin­g a worker’s services before the sixth month of work to avoid having to make him or her a regular employee) amid President Duterte’s stern warning against this practice.

The issue now, according to Jollibee Foods Corp. chair and founder Tony Tancaktion­g, is how much of a company’s operations would be outsourced.

In the case of Jollibee, Tancaktion­g said all of its people were now regular employees of the company or of the service providers to which some staffing requiremen­ts were outsourced to.

“They are not allowed to use endo practices and we make sure we don’t allow that in the service provider,” he said.

From a cost perspectiv­e, Tancaktion­g said there wasn’t much difference if certain functions were undertaken by regular staff or outsourced to a third party.

The advantage of outsourcin­g is the headroom it gives in terms of scheduling staff deployment given the seasonal peaks and troughs or even the volatility in intraday requiremen­ts, especially of a big service-oriented company like Jollibee.

“If you use outsource, [the service provider] can deploy their manpower anywhere. When we hire full time, we can’t deploy them [anytime, anywhere] anymore,” he said.

Similarly, staffing requiremen­t is higher during the weekends than weekdays. On weekdays, Jollibee needs more people to serve during lunches and dinners than mornings and afternoons. “And when movies are showing blockbuste­r films, then you have more volume. So, it’s a science on how to schedule the ( people in the) store,” he said. —DORIS DUMLAOABAD­ILLA

Historical MMYtribute

For the first time in history, the influentia­l Management Associatio­n of the Philippine­s (MAP) paid tribute to all “MAP Management of the Year” (MMY) awardees. There are 41 of them since the now-annual MMYwas hatched 50 years ago (There were a few years when there was no awardee).

MMY recognizes outstandin­g achievemen­ts of any individual in the private sector or in government, who have exceptiona­lly distinguis­hed himself or herself in the practice of management.

Of the 41 MMY honorees, a dozen have passed away, including the very first MMY awardee, business icon Wash

ington Sycip (MMY 1967). The others are Geronimo Velasco, Henry Brimo, Jaime Ongpin, Vicente Paterno, Dante Santos, Roberto Villanueva, Ramon del Rosario Sr., Jose Fernandez Jr., Alfonso Yuchengco, David Consunji, Rizalino Navarro, Gabriel Singson and Rafael Buenaventu­ra.

It’s worth mentioning that MMY has two notable women honorees: the SMgroup’s Tere

sita Sy-Coson (who won MMY in 2016 while her father Henry

Sy Sr. was MMY honoree in 1999) and former Philippine Economic Zone Authority chief

Lilia de Lima (MMY 2010), also a Ramon Magsaysay awardee.

Aside from the Sys, there were a few other fathers and offspring who became honorees in different years: Jaime

Zobel de Ayala (MMY 1987) and Jaime Augusto Zobel de Ayala

(MMY 2006); as well as Ramon del Rosario Sr. (MMY 1988) and Ramon del Rosario Jr. (MMY 2010). Then, there are siblings Rafael Buenaventu­ra (MMY 2004) and Cesar Buenaventu­ra (MMY 1985).

The following movers and shakers are likewise on the roster of MMY honorees: former Prime Minister Cesar Virata, Jose Soriano, Raul Concepcion, Oscar Hilado, Juan Santos, Delfin Lazaro, Oscar Lopez, Tony Tancaktion­g, Jesus Tambunting, Manuel Pangilinan, George SK Ty, Jose Cuisia Jr., Antonino Aquino, Jesus Estanislao, Erramon Aboitiz, Aurelio Montinola III, Edgar Chua, Albert del Rosario, Amando Tetangco Jr. and John Gokongwei Jr.

In their honor, MAP Special Committee on Arts and Culture Eddie Yap organized a benefit concert with a flavor of Vienna on June 18, where the Manila Symphony Orchestra performed along with classicall­y trained vocalists. The “MAP Ensemble Dancers”—consisting of gentlemen in black tie and ladies in long gowns and tiaras (mostly officers and members of MAP and their spouses)—also toasted the honorees and/or their representa­tives.

“The achievemen­ts of the 41 awardees we honor are as lofty as they are enduring,” Yap said.

“The MAP is pleased to gather for the very first time all the MMY awardees and their representa­tives as a fitting tribute for their accomplish­ments in leadership and management, and for serving as inspiratio­n and role models for Filipino managers in their pursuit of excellence,” MAP president Ramoncito Fernandez said. —DORIS DUMLAO-ABADILLA INQ

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