Competition body zeroes in on 10 sectors in study

January 18, 2018 - 5:01 PM
The logos of PLDT and Globe Telecom are superimposed on the facade of the Court of Appeals. The government is moving to pave the way for the entry of a third player in a market dominated by the duopoly. INTERAKSYON FILE IMAGE

MANILA – The Philippine Competition Commission (PCC) is embarking on a study of anti-competitive practices in 10 priority sectors that may touch on the impact of a contentious deal involving the country’s telecommunication duopoly.

Apart from telecoms, PCC Commissioner Stella Luz A. Quimbo announced in a briefing in Makati City on Wednesday that these sectors are rice, meat and poultry, pharmaceuticals, air transportation, land transportation, agricultural credit, digital commerce, retail, and certain areas of manufacturing.

“These sectors tend to be those that have big impact on consumers,” Quimbo said.

The PCC is tapping third-party experts to undertake the market study, citing its limited resources.

The review is expected to be completed within the year.

Commissioner Johannes Benjamin R. Bernabe clarified that the market study for the telco sector is a “separate exercise distinct from the review” of the acquisition by PLDT, Inc. and Globe Telecom, Inc. of telecommunication assets owned by San Miguel Corp. since it will be looking at the whole gamut of services provided in the industry.

The market study will encompass voice telephony, fixed broadband, delivery of Internet services and mobile Internet service provisions, among others.

The PCC has been barred from scrutinizing the duopoly’s purchase of San Miguel’s telecommunication assets after the Court of Appeals affirmed the P70-billion deal in an October ruling.

Last month, the competition body asked the Supreme Court to lift the injunction on the buyout review.

“In terms of looking at the effect of the consolidation of telco assets in the hands of PLDT and Globe, in a way, I think — without going too much into the review — it will be difficult to avoid looking at the consequences on the telecoms industry,” Bernabe said. “It is an indispensable element of the telecoms industry.”

The PCC can use the market study to open a case against any market player and help government agencies craft policies to prevent anti-competitive practices.

If faced with an “abuse of market dominance” in telecommunications for instance, “one of the remedies you can impose is to require divestment of certain assets — in this case frequencies — that the telco player can have,” Bernabe said.

The PCC estimates that 12.8% is the only portion that can be allocated to a potential third player.

The study can help a potential third telco player to compete in the market, with the PCC set to meet Department of Information Technology and Communications Secretary Eliseo M. Rio, Jr. next week to work on a possible memorandum of agreement on information exchange.

The department has released the guidelines on the qualifications and criteria in the selection of a new telco player in line with President Rodrigo R. Duterte’s order that a new player should be able to enter by the end of this quarter.

The PCC is set to seal more collaborative partnerships with a number of government agencies after signing cooperation agreements with the Bangko Sentral ng Pilipinas, Commission on Audit, Philippine Statistics Authority, and Insurance Commission, among others.

Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains an interest in BusinessWorld through the Philippine Star Group, which it controls.