Dito accuses Globe, Smart of ‘abuse’ of dominant positions

Published August 8, 2022, 5:33 PM

by Emmie V. Abadilla

Dito Telecommunity, the third telco player owned by businessman Dennis Uy, has filed complaints before the Philippine Competition Commission (PCC) against telco duopoly Globe Telecom and Smart Communications for alleged “abuse” of dominant positions.

PCC OIC Chairperson Johannes R. Bernabe said the agency also received Monday, Aug. 8, Dito’s two separate complaints against its competitors Globe and Smart for possible anti-competitive practice in their interconnection agreements.

In its 100-page complaint, DITO accused the duopoly of Globe and Smart of putting an interconnection barrier against competition and “abusing their dominant positions” in the industry.

Although interconnection among telcos is mandated under the law, “It has become very difficult for our subscribers to interconnect with Globe and Smart,” DITO Chief Administrative Officer Adel Tamano told a press conference Monday, Aug. 8.

Only one out of 100 calls should fail to come through, under the Grade of Service for Interconnection provision of the National Telecommunications Commission (NTC).

But to date, only 20 to 30 calls from DITO can get through to Globe and Smart, according to DITO Chief Technology Officer Rodolfo Santiago.

“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 completed its interconnection with Globe and Smart prior to its March 2021 commercial launch to allow subscribers to text and call across all three networks.

But the interconnect capacity of the duopoly has failed to keep up with the demand from DITO’s 11.4 million subscribers.

Hence, DITO subscribers find it difficult to text or call Globe and Smart users.

DITO sought the help of NTC, which continues to mediate in the issue for a year now. “But they can only do so much,” DITO executives conceded.

The problem is the duopoly is “making interconnection subject to commercial conditions”, according to DITO executives but declined to elaborate.

Now, DITO was constrained to file the anti-competition case versus 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 said its Competition Enforcement Office (CEO) is now evaluating the merits of Dito’s complaints. The Commission has 10 days within which to decide whether or not to give due course to 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.

The PCC shall also consult with the National Telecommunications Commission for related regulatory concerns.

An interconnection agreement among telcos is basically allowing networks to connect and exchange data. When two telcos agree, the subscribers from those two networks can now call and send SMS to each other.

Dito alleged that Globe and Smart are “not very compliant” with their interconnection agreement making it difficult for Dito subscribers to connect to the two other telcos.

“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 consortium of Davao businessman Dennis Uy’s Udenna Corporation (through its subsidiary Dito CME Holdings Corporation), and Chinese state-owned China Telecommunications Corporation, a parent company of China Telecom..