An imploding Philippine telco industry

Summary:First, allow me to apologize to the readers of this blog as I have not been able to post entries in the past few months. I actually have a number of "legal" excuses, but I wouldn't make the trouble of narrating them here.

First, allow me to apologize to the readers of this blog as I have not been able to post entries in the past few months. I actually have a number of "legal" excuses, but I wouldn't make the trouble of narrating them here.

Last January, I had intended to write about the data cap issue being floated then by local broadband players. It was a very contentious issue that riled a lot of people.

On hindsight, I should have chosen another topic since I never got the opportunity to sit down and write it. The National Telecommunications Commission (NTC), the country's regulatory body for the telecoms sector, eventually scrapped the proposal and promised not to include it in a pending circular setting a minimum broadband speed for the country.

Between that time and now, a number of significant developments have transpired. One of those events was the launch of SkyCable's "game-changer", a 5Mbps broadband offering for only 999 pesos (about US$23) a month--but with a 15GB data cap.

But the biggest news to come out of the telco market, of course, was the mammoth acquisition of the country's third-largest telco player, Digitel--owner of the low-cost brand Sun Cellular--by top dog PLDT for a total value of 74.1 billion pesos (about US$170 million).

This takeover has set off an unprecedented number of stories and commentaries, legislative inquiries, and an ugly word-war between PLDT and its chief rival Globe Telecom.

The bitter exchange of barbs has been so vicious that the media has become the forum where the legal counsels of the competing telcos would spar with a statement being issued almost every day in answer to a certain issue related to the acquisition.

At one point, PLDT called Globe a sore loser for criticizing the deal when it also attempted to buy Digitel for a much lesser price of 35 billion pesos. Globe hit back by branding PLDT a monopolist, pointing out that its record in the past has been awfully anti-consumer.

Legislators have logically joined the fray. While most members of the Congress are clearly against the deal, PLDT has found an ally in Senate President Juan Ponce Enrile who said the purchase no longer needs congressional and regulatory approvals since transaction merely involved a "transfer of stocks" and not an outright sale.

The latest twist in this long-running saga is the claim of a militant lawmaker that some officials of NTC are on the payroll of the local telcos. This is the reason, he said, why the regulatory agency would most likely approve the deal.

Well, it's obvious that the industry is indeed consolidating. However, I'm not quite sure if the PLDT-Digitel deal is a step in the right direction for both the industry and the consumers.

Topics: Telcos

About

Joel has been a media practitioner since 1996, starting off as a reporter and eventually becoming editor of a pioneering IT trade newspaper in Manila. He is currently one of the content producers of a Manila-based developmental website.

About

Melvin G. Calimag is currently the executive editor of an IT news website in the Philippines. Melvin has been covering the local IT beat for the last 13 years. He is currently a board member at the IT Journalists Association of the Philippines (CyberPress), and also serves as a charter member with the Philippine Science Journalists Associ... Full Bio

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