Smart Communications Philippines

When titans clash

It should be interesting to see how the society of the country's largest telecommunications deal with issues hurled against him by his main competitor.

The Philippine Long Distance Telephone Company (PLDT) is holding its annual shareholder meeting today amid accusations it is trying to drive competition through the acquisition of Digitel Telecommunications Philippines Inc.

By acquiring Digitel, which owns Sun Cellular, PLDT is still solidifying its dominance in the mobile telecommunications sector.

Smart Communications PLDT owns and is the leading provider of wireless services in the country.  If the merger between PLDT and Digitel pushes through, PLDT will have acquire more than 70 percent of the wireless and mobile telecommunication market in the country leaving behind its main competitor Globe Telecommunications wondering if a duopoly will not harm consumer interests – eventually.

Globe and consumer groups are questioning PLDT’s acquisition of Digitel which is expected to be approved by its stockholders today.

The only way the merger could be stopped is for the National Telecommunications Commission, the government regulatory body, to disapprove the deal – a very tall order but not exactly undoable.

Globe said it is ready to question the merger all the way to the Supreme Court if NTC approves the deal.

Digitel is the third player in the highly lucrative and competitive mobile telecommunications industry.  Digitel caters to the low end users offering services PLDT and Globe could only wished it did not provide its 16 million plus subscribers.  Globe has about 26 million subscribers while the rest of 95 million Filipino mobile phone users are Smart subscribers.

For many, owning a Sun mobile phone number is likened to having a spare tire or a secondary newspaper.

Both Globe and Smart have said Sun’s cheap rates are in the long run inimical to the industry and cannot be sustained for so long given the continuing evolution of technology which does not come in cheap.

Nevertheless, both Globe and Smart have eyed Sun for acquisition only with different circumstances and results.

The Gokongwei-owned Digitel is converting its assets into shares in PLDT, once the takeover target of the mall and food conglomerate.

The owners of Globe are no stranger to big capital in the Philippines.  In fact, they belonged to the old and quintessential big business elite in the country.  The Zobels have more than 150 years of doing business in the country, long before the Filipino revolutionaries drove Spain from this country.

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