Antitrust regulators said Friday that they would launch a preliminary probe into a complaint brought by DITO Telecommunity, which accused long-serving incumbents Globe Telecom Inc. and Smart Communications of abusing their market dominance in their interconnection arrangements.
The Philippine Competition Commission (PCC) said in a statement that it “found reasonable reasons” to investigate DITO, the China Telecom-backed telecom start-up of Davao-based tycoon Dennis Uy, an associate of former President Rodrigo Duterte.
The PCC stated that its enforcement office would investigate whether Globe and Smart violated the Philippine Competition Act. DITO says in its complaint filed with the PCC that only 30% of calls originating from their network can connect with Globe and Smart subscribers.
The PCC stated that it would coordinate and communicate with the National Telecommunications Commission, the telecom regulator, and other relevant agencies. At the same time, it conducts the probe “for regulatory and technological issues.”
“The PCC takes complaints of anti-competitive behavior very seriously,” the commission said.
“Without prejudging the outcome of the (enforcement office’s) investigation, the PCC reminds players with substantial market power, not only in the telecommunications industry but across sectors, of their responsibility to compete fairly and to adhere to the principles of competition,” it added.
The law requires the interconnection of telecommunications companies. According to DITO, the connectivity troubles have been ongoing for “nearly a year” and have stifled the company’s expansion.
However, if the PCC sides with DITO and finds that Globe and Smart are hindering DITO users from making successful phone calls, they will be in severe trouble. PLDT Inc.’s wireless subsidiary is Smart.
Meanwhile, Globe has requested the NTC to order DITO to pay P622 million in interconnect penalties caused by “fraudulent calls conducted through DITO’s network to Globe, circumventing appropriate voice traffic channels.”
DITO chief administrative officer Adel Tamano said in response to the PCC’s vote, “today is a momentous day for Filipino telco users.”
“From the onset, this case has not been about mere commercial terms but public interest in interconnection between the telco players and fostering genuine competition in the industry,” Tamano added.
When asked for comment, Terry Ridon, convenor of the infrastructure think tank InfraWatch, said that the PCC’s preliminary probe is effectively only the first step toward establishing whether anti-competitive activity exists in contracts linked to telecom interconnection.
“This is by no means an early success for DITO since it allows the PCC to investigate further the issue, notably the specific market and commercial arrangements on which the complaint is founded,” Ridon added.
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