Leading telcos Smart Communications Inc. and Globe Telecom Inc. have been sued by upstart third telco player Dito Telecommunity Corp. for supposedly abusing their dominant positions by imposing commercial demands for interconnection.
Dito filed the cases before the Philippine Competition Commission (PCC) on Monday morning, according to Dito Chief Administrative Officer Atty. Adel Tamano.
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The cases involve violation of Section 15b and 15c of the Philippine Competition Act (PCA). Both provisions pertain to the abuse of dominant positions by imposing barriers to entry or committing acts that prevent competitors. From growing in the market and making a transaction subject to acceptance by the other parties even without connection with the transaction.
“When our competitors do acts that are anti-competitive, that abuse their dominant positions, we are constrained to seek redress,” he said in a press briefing Monday. “It is on behalf of these 11 million subscribers that we are filing these cases with the PCC.”
Tamano explained that the cases stem from the limited capacity that both Smart and Globe provided Dito for interconnectivity, which essentially allows subscribers to call from one operator to another.
According to Tamano, Dito subscribers are finding it hard to call Smart and Globe subscribers because the interconnectivity capacity was not enough.
The National Telecommunications Commission (NTC) measures the quality of interconnectivity by so-called grade of service. Under this metric, telcos are given a leeway of having one out of 100 calls not interconnected. But in Dito’s case, only 20 to 30 calls to other networks push through out of 100, Tamano claimed.
“It is unfair for our subscribers because when Smart and Globe call us, they’re able to get through, but when we call them, we can’t,” he said.
While Tamano declined to divulge the supposed transaction, he said Smart and Globe are asking for certain commercial concessions, which he also refused to explain further.
The PCC issued a statement on Monday after receiving the complaints.
“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 PCC OIC Chairperson Johannes Bernabe. “As such, our 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,” Bernabe said in the statement. He also said that the agency plans to consult with the NTC for “related regulatory concerns.”
Dito is seeking compensatory damages, as the lack of interconnection has resulted in losses—both in subscribers and revenues—for Dito, although it did not specify exactly how much it is seeking from its competitors.
Tamano said Dito had tried to make amicable settlements with both Smart and Globe, but it was eventually left without a choice but to ask the help of the NTC and the PCC.
“The NTC has been incredibly helpful,” Tamano said. “They have sought for us to go through mediation…yet despite all our efforts (Globe and Smart) have refused to provide genuine interconnection.”
Dito currently has about 11.4 million subscribers and is targeting to end the year with at least 12 million subscribers.
Both Smart and Globe said they have yet to receive a copy of the complaint.
“We are 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,” Smart parent PLDT Inc. said.
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