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

[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.

[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