Dominguez: Prioritize telecoms reforms
The government should prioritize regulatory improvements over finding a challenger to the PLDT-Globe duopoly, Finance Secretary Carlos Dominguez 3rd said on Wednesday.
“The third telco is one way of improving [the industry]. Another way is to have a better regulatory environment and I think that is the priority rather than a third telco,” he claimed during a Kapihan sa Manila Bay forum.
Dominguez, whose department was represented in an oversight committee formed to handle the third telco selection process, had proposed an auction-based process to generate revenues for the government, but was rebuffed by the Department of Information and Communications Technology (DICT) and industry players.
In the end, the oversight panel decided to go with a points-based approach where the winner would be chosen based on spending, population coverage and broadband speed pledges over a five-year period.
Draft rules are now being finalized and the DICT has said that the so-called “new major player” could be named before the year ends and be operational sometime next year.
“Even if we have a third telco, if the regulations are ineffective … again, we have to go down to the basic issues on the industry,” Dominguez added, identifying these as interconnection charges and access to towers, dark fiber and frequencies.
While the National Telecommunications Commission (NTC) reduced mobile voice call and text interconnection charges last month to P0.50 and P0.05 per minute, respectively, from P2.50 and P0.15, the Finance chief said this remained a critical issue.
“Why is that important? Because if you get the third party here, the current guys can cripple it by putting a very high interconnection charge. So that needs to be addressed,” he claimed.
The issue of access to communications infrastructure and frequencies also has to settled.
“Are you going to force the third telco to build their own towers or are you going to make it an even playing field … [where]everybody who has towers must make it available to everybody else even at a rental basis?,” he asked.
The dark fiber option, or the leasing of fiber optic cables from another service provider, also has to be clarified as the third telco may be hampered by having to build its own network.
Dominguez also questioned if the frequencies to be made available to the third player would be sufficient for it to compete on a fair basis.
Draft rules issued by the NTC include the possibility of awarding frequencies formerly held by Bayan Telecommunications, which remain disputed and covered by an injunction.
“I believe to this day that these regulatory issues need to be addressed. Every time I read about the industry — it’s not from me but studies from private sector — it says what the public is getting here is inferior to what the public is getting elsewhere,” Dominguez said.
“I don’t mind being the villain. But the point is are we asking the right question? Or are we rushing into something that will not help in the long run because the regulatory environment is not sufficient?”
Picking a third telco is just a “means to an end,” he said, and “the end is better, more affordable, faster, more accurate, more coverage for access to communication.”
Comments from the NTC and DICT were not immediately available but an analyst agreed that regulatory improvements “should’ve been done long ago.”
“That, I think should’ve gone without even saying. Whether a third telco is coming in or not, adjusting regulations in the industry — any industry for that matter — is a continuing undertaking,” Philstocks research head Justino Calaycay Jr., said.
“Having said that, I am in fact saddened by the incessant talk, and clamor, for a third telco per se,” he added.
Calaycay also pointed out that “the government’s effort should be directed at opening up the industry to potential competition, be they a third, fourth, fifth or even sixth telco.”
“Limiting the purview to but a third player seems to suggest favoring one bidder. The risk of breaking up the duopoly by introducing another entity to the math may equate to, in the long run, The Big Three.”
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