With purchase of SMC telco assets, better services expected of Globe, PLDT

With purchase of SMC telco assets, better services expected of Globe, PLDT

FOLLOWING the purchase of the telecommunication assets of conglomerate San Miguel Corp. (SMC), stakeholders believe Globe Telecom and the Philippine Long Distance Telephone Co. (PLDT) no longer have reasons for their widely-criticized Internet service.

Philippine Software Industry Association (PSIA) Jonathan de Luzuriaga notes that the added assets jointly bought by the two players for P69.1 billion is a welcome development, despite disappointment expressed by some who anticipated the inclusion of a third player that could have improved services priced at a cheaper rate.

“I’m personally in favor (of the acquisition). Give it (the bandwidth) to the players who could utilize it. That’s going to be a big boost to the (telco) industry,” said de Luzuriaga, also the former executive director for industry affairs of the IT and Business Process Association of the Philippines (IBPAP).

De Luzuriaga, who was in Cebu City yesterday for the Cebu Digital Transformation Forum, said the Philippines is a “laughing stock” in the Asia Pacific for its bandwidth quality.

“Hopefully, that’s going to alleviate some of the fears that we have. With the added capability to major telcos, there’s no reason anymore not to deliver good quality service,” he said.

The acquisition deal of SMC’s telco assets will now give PLDT and Globe access to more radio frequencies, particularly the 700 megahertz (MHz) spectrum. The deal will also include returning 85 MHz to the government, allowing for a possible third competitor to enter the market, said COL Financial market analyst Angelo Lecaros.

“SMC’s access to the 700 MHz frequency boasts of better indoor penetration and wider coverage compared to what the current telcos have. However, the return of unused spectrum assets to NTC (National Telecommunications Commission) still presents the opportunity for another player to enter the industry in the future,” COL Financial’s market study reveals.

Hence, more developments on this may again dampen PLDT and Globe’s earning prospects, it added.

As to concerns on better Internet service and cheaper rates, Wilfredo “Jun” Sa-a, Jr., managing director of the Cebu Educational Development Foundation for Information Technology (Cedfit), said those remain to be uncertain.

“How they will use it, that we have to see. Whether that will be beneficial for consumers, or more affordable, we don’t know until that happens,” he said.

The Cebu Chamber of Commerce and Industry (CCCI) has consistently called for faster Internet service and hopes the decision of PLDT and Globe to purchase San Miguel’s telco assets is motivated by its dedication to provide better Internet to consumers.

“We hope that with the combined resources and expertise of the two telcos, the consumer will come out the winner, with better services available in the market,” said CCCI president Melanie Ng.

PLDT and Globe, in separate statements, said that they will each acquire half of all equity interest of SMC’s telco business. Shares of both companies jumped up after it announced the deal.

Meanwhile, the Philippine Competition Commission (PCC) said that it will look into the telcos’ transaction.

“The Commission shall assess and take action, as appropriate,” the regulator said, in a statement. The PCC is a government body formed through the Philippine Competition Act that has the power to review proposed mergers and acquisitions and even prohibit those that will substantially prevent, restrict or lessen competition in the market.

However, PCC is yet to finalize the implementing rules and regulations (IRR) of the Philippine Competition Act.

In a memorandum circular dated Feb. 16, PCC said transactions of PSElisted companies involving P1 billion and above that executed and implemented before the effectivity of the IRR are mandated to notify the commission through a letter, detailing the parties involved and the key terms of the transaction, among others.

PCC said such transactions are “deemed approved” except when submitted documents contain false material information.