DITO Telecommunity, controlled by billionaire Dennis Uy, has filed charges with the Philippine Competition Commission (PCC) against Globe Telecom and Smart Communications for alleged “abuse” of dominant positions.
PCC OIC Chairperson Johannes R. Bernabe stated that the agency also received DITO’s two separate complaints against Globe and Smart for suspected anti-competitive practices in their interconnection agreements on Monday, Aug. 8.
DITO accused Globe and Smart of erecting an interconnection barrier against competition and “abusing their dominant positions” in the industry in its 100-page complaint.
Despite the fact that interconnection across telcos is required by law, “it has become exceedingly difficult for our subscribers to interconnect with Globe and Smart,” DITO Chief Administrative Officer Adel Tamano said at a press conference on Monday, Aug. 8.
Under the National Telecommunications Commission’s Grade of Service for Interconnection requirement, only one out of every 100 calls shall fail to connect (NTC).
However, according to DITO Chief Technology Officer Rodolfo Santiago, only 20 to 30 calls from DITO can currently get through to Globe and Smart.
“They’re giants. Our market share for the entire market is at most five percent. There would be no question who is in the dominant position,” Tamano pointed out. “If our interconnection is better, our market share will be bigger.”
DITO has finalized its connectivity with Globe and Smart ahead of its commercial launch in March 2021, allowing subscribers to text and call across all three networks.
However, the duopoly’s connection capacity has not kept up with the demand from DITO’s 11.4 million users.
As a result, DITO subscribers have difficulty texting or calling Globe and Smart users.
DITO requested the assistance of the NTC, which has been mediating the matter for over a year. “But they can only do so much,” DITO officials admitted.
According to DITO officials, the concern is that the duopoly “makes connectivity susceptible to commercial circumstances.”
DITO was now forced to bring the anti-competition action against Globe and Smart at PCC.
“PCC has no jurisdiction over the commercial conditions of our interconnection. Anti-competition is our focus,” Tamano stressed.
“Interconnection is an essential component of the telecommunications industry as it allows interoperability and exchange of calls, SMS, and other information from one network to another,” said Bernabe.
Bernabe stated that its Competition Enforcement Office (CEO) is now reviewing DITO’s allegations. The Commission has 10 days to decide whether or not to take action on the complaint.
“If given due course, our CEO will proceed to investigate the charges and if it subsequently finds sufficient basis, file with the Commission en banc a Statement of Objections against the allegedly erring entities,” said Bernabe.
For associated regulatory considerations, the PCC shall also engage with the National Telecommunications Commission.
An interconnection agreement between telecoms allows networks to connect and share data. When two telecoms reach an agreement, subscribers from those two networks can now phone and SMS each other.
DITO said that Globe and Smart’s interconnection agreements are “not very compliant,” making it impossible for DITO subscribers to connect to the two other telecoms.
“We have yet to receive a copy of the complaint, but we can assure the government and the public that PLDT and Smart have always supported and ensured fair competition in the Telco industry,” according to the PLDT statement issued today.
“We don’t have a copy of the complaint yet,” said Yoly Crisanto, Globe Chief Sustainability and Corporate Communications Officer.
“Until such time, we will refrain from issuing a statement. Globe reiterates that it has always advocated for fair business practices and competing on a level playing field,” she noted.
DITO is a partnership between Davao businessman Dennis Uy’s Udenna Corporation (through its subsidiary DITO CME Holdings Corporation) and China Telecommunications Corporation, the parent firm of China Telecom.