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WITH the Court of Appeals decision stopping the Philippine Competition Commission (PCC) review of the R70-billion sale by San Miguel Corp. (SMC) of its telco assets to the Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom, we expect major improvements in the coming months in the services of the country’s two major telecom providers.
After about two weeks of hearings, the Court of Appeals issued a writ of preliminary injunction directing the PCC to desist from further investigating the sale agreement while the court was hearing the petitions filed by PLDT and Globe. The PLDT has argued that the deal had already been deemed approved by operation of law, when the PCC stepped in. In fact, it said, its subsidiary Smart had already started implementing the deal and using the frequencies acquired jointly with Globe from SMC.
The Philippine Competition Commission sought to investigate the deal on the ground that it stopped the entry of a third telcom firm that was poised to launch its mobile business before the year 2016 ends, but this firm did not appear to be capable of mounting a so-called third-player challenge.
On the PCC claim that the deal was likely to substantially prevent or restrict competition, it has been pointed out that the market today already has competition, not only between Smart and Globe but also with two other operating firms. If there is any large entity that wants to set up a telecom venture, it is free to do so.
Smart and Globe had been given one year to improve their services after the 700-megaherz deal that was approved by the National Telecommunication Commission. They had begun to do just this when the PCC stepped in and announced it was investigating a possible violation of the Philippine Competition Act.
With the Court of Appeals ruling, the operating telecom firms should now step up the expansion they had already begun. The 700-megaherz spectrum has been inactive all these years; it should now put to full use by PLDT and Globe to improve their Internet services.
These two dominant operators have declared their commitment to do this and had, in fact, begun right after their firms acquired the new spectrum. It will help boost the nation’s hopes if they now announce a timetable, a progress report on steps being taken to achieve the promised speed in Internet services, and – as soon as feasible – a lowering of costs to consumers.