The Emerging Duopoly: PLDT-Smart and Globe

[jpdm]

When President Ramos came into power he initiated the
dismantling of a telecommunication monopoly called PLDT. After almost two decades, a duopoly has emerged in the market.....

In an economy, duopoly is a double edge sword...either we benefit or not. But, in my opinion the consumers in the end will not benefit because of less competition and few choices....

For the meantime....

PLDT-Smart-Piltel (Talk and text) is swallowing smaller telecom firms (CURE etc.)
Globe-IslaCom (TM) is doing the same thing.

Far third is Digitel-SUn.. rumored to be losing money daw....

Kolelat is Bayantel..........although Bayantel does not have a cellular network..


Another busy partylines in the future.........

[Altis6453]

Let's face it. For businesses which are classified as public utilities, there's not much room for competition --- especially in the Philippine economic setting. In fact, the business of public utilities does not thrive in perfect competition. You get at most 2-3 operators and that's it.

Yes, laws have been enacted to dismantle the telco monopoly of PLDT. But, when you examine the provisions carefully, you can immediately suspect that a lot of these laws were drafted right out of PLDT's legal department considering that a lot of the provisions of this law still tolerates certain "monopolistic behavior".


Consider the other factors which contributed to the "demise" of the competition:

1. Very high US$-denominated capex for telco equipment;
2. Limitation on allowable "service areas"
3. Interconnection/access difficulties with established telcos
4. Low (even less than market) service rates offered to subscribers

There's very little business incentive for newer players to enter the market, so to speak.

If we truly want a free, competitive environment for telecommunications, we must limit PLDT's ability to exercise its monopolistic behavior. Interconnection must not only be mandatory but immediate and universal for all services (landline, CMTS, SMS, VAS).

The installation of a network facility (whether wireless or landline) should be market-determined and not dictated by law.

[froshie1]

Let's face it. For businesses which are classified as public utilities, there's not much room for competition --- especially in the Philippine economic setting. In fact, the business of public utilities does not thrive in perfect competition. You get at most 2-3 operators and that's it.

Yes, laws have been enacted to dismantle the telco monopoly of PLDT. But, when you examine the provisions carefully, you can immediately suspect that a lot of these laws were drafted right out of PLDT's legal department considering that a lot of the provisions of this law still tolerates certain "monopolistic behavior".


Consider the other factors which contributed to the "demise" of the competition:

1. Very high US$-denominated capex for telco equipment;
2. Limitation on allowable "service areas"
3. Interconnection/access difficulties with established telcos
4. Low (even less than market) service rates offered to subscribers

There's very little business incentive for newer players to enter the market, so to speak.

If we truly want a free, competitive environment for telecommunications, we must limit PLDT's ability to exercise its monopolistic behavior. Interconnection must not only be mandatory but immediate and universal for all services (landline, CMTS, SMS, VAS).

The installation of a network facility (whether wireless or landline) should be market-determined and not dictated by law.

Are you saying switching to Sun will help a lot? :D

[russpogi]

...Kolelat is Bayantel..........although Bayantel does not have a cellular network..

Actually, they do. They use the cellular network on the Bayantel Wireless Landline, similar to PLDT Landline Plus using Smart's GSM network.

[uls]

the telecom business involves huge capital.

So it is not surprising that there are only a handful of players in the biz.

Even in rich countries, only 2 or three companies dominate the telecom sector

Japan - NTT, KDDI

US - AT&T, Verizon

[Jun aka Pekto]

the telecom business involves huge capital.

So it is not surprising that there are only a handful of players in the biz.

Even in rich countries, only 2 or three companies dominate the telecom sector

Japan - NTT, KDDI

US - AT&T, Verizon

True. Here in town, it's either Q-west or Cox Cable. Cox Cable handles cable tv, telephone, and internet on my monthly bills. These companies each have their own turf much like the airlines here. But, if they deliver on the services they promise, who am I to complain?

[jpdm]

Kala ko may Next Mobile and Express Mobile.....

hindi puede na magdominate lang dalawa....

I think SUn should survive and should seriously challenge the two behemoths....

[uls]

Sun is a major player. Everyone i know has a sun SIM.

Ya it would be great to have another GSM network provider...

now the question is... my usual question... Sino ang mamumuhunan?

The other taipans?

a foreign telecom company?

Anyone wanna get their million dollar cell sites blown up?

hehe

[jpdm]

--Eastern Telecom nawala na..

--RCPI extinct na....

--PT&T nalusaw na...

--CURE nabili na..

--BellTel lumubog na...


--Bayantel...takot pa mag-cellular...

[Altis6453]

Are you saying switching to Sun will help a lot? :D

Well, what I'm saying is that changing the rules on interconnection and mandated roll-out of facilities would be helpful.

At present, PLDT/SMART and GLOBE/INNOVE exert tremendous pressure on other players due to their access charges.

Also, the NTC requires new players in the cellular service business to roll out 400,000 landlines within 3 years from the grant of their provisional authority or CPCN. When you consider that the capex investment for a single landline is about US$ 1,000 from your inside plant to customer premises, that's a pretty daunting amount to spend. Add to that the Php 10 Million you have to spend for putting up each cell site. Butas talaga bulsa mo.

[Honda97]

I heard Sun is already second in the post-paid business. Globe is 1st in this category. Smart is way ahead in terms of prepaid lines. Bayantel is focusing on data and DSL connections. Their wireless landline service is limited to their service area scheme.

What happened to Liberty Telecoms?

[Altis6453]

I think LIBTEL is under receivership. Dunno about the state of its permits and licenses with the NTC.

[jpdm]

Mukhang the next battle ground of the telecoms is the wireless landline business..


Anyway, this will benefit the consumers...

[ringostarr]

wireless landline ang gulo di ko pa din maintindihan yan pano maging landline eh wala nga physical line

it's just an excuse by local landline companies to enter the cellphone race

siguro naman it's high time na tigilan na ang per minute charing sa cellphone, gawin na din fix na lang parang landline para di masyado redundant

yun nga lang dami siguro magkaka-cancer sa'tin kaka cellphone babad

[jpdm]

I hope these companies will be designated by the National government to continue the NBN project as BOT...

[jpdm]

...Patay mga telecom pagna-implemet yung free sms ng gobeyerno....


...ano ba yan...kung ano-ano na lang iniisip ng gobyerno hindi mula alisin tax sa oil at koryente..

[jpdm]

[SIZE=2]Malulugi mga telecom nito...[/SIZE]

[SIZE=2]'Telcos won't lose money with free SMS'[/SIZE]

ABS-CBN News online
May 26, 2008 [SIZE=2]
Telecommunications companies (telcos) will benefit from the proposal to cut charges on text messaging or short message service (SMS), an official of the Department of Transportation and Communications said Monday.

"I think the [telecommunications] industry will grow if [text messaging] service will be offered for free," DOTC spokesman Thompson Lantion told ABS-CBN's morning show, "Umagang Kay Ganda."

Lantion added that the 27 million Filipino cellular phone users who pay for text messaging would surely avail of more telco services if SMS will be offered to the public for free.

The DOTC official, however, clarified that the proposal to file a petition on removing SMS charges is not yet final. He said the proposal's pros and cons are still being studied by a technical working group formed by Secretary Leandro Mendoza.

He said another subject of the study is to determine how telcos will maintain its profits in the mobile industry.

Lantion said initial findings of the group showed that the government is receiving payment from telcos only from their voice or mobile phone call charges.

He said the proposal will also be presented before the telcos so that they will be able to come up with a better way of cutting SMS charges.

"All stakeholders should be consulted. The technical working group is seriously looking at all the issues," he said.

Last week, Mendoza announced before the media that telcos should not charge mobile phone users for text messaging.

"Carriers should only charge for voice calls because in their franchise, they only pay for voice services," the DOTC secretary said.

He said DOTC will file the petition before the National Telecommunications Commission.

Mendoza said he expects "a long battle" with the telcos.[/SIZE]

[Cult Zero]

first meralco, now telecoms. after the utility industry who's next? our government is all over the place.

"I think the [telecommunications] industry will grow if [text messaging] service will be offered for free,"

^ what a bunch of BS

[_Cathy_]

If text message becomes free, we might be back to our old mid-90s way of turning the phone outside down or raising it like an antenna to send a text message. hehe. Tapos may mga text na sa susunod na araw ng dumarating.

[Cult Zero]

^ hindi lang yan. gaya ng sinabi ng attorney ng globe, they may stop offering sms / text service altogether. baka lumabas mataas pa ang operating cost sa kikitain nila considering our rates is already one of the lowest. lahat tawag na lang.