Globe presents witnesses

By Lenie Lectura, Business Mirror

Posted at Jul 19 2011 07:02 AM | Updated as of Jul 19 2011 03:02 PM

MANILA, Philippines - Globe Telecom Inc. on Monday presented two key officials in a bid to discredit Philippine Long Distance Telephone Co. (PLDT), which is seeking regulatory approval for the share-swap deal entered into with Digital Telecommunications Philippines Inc. (Digitel).

First to take the witness stand was Froilan Castelo, Globe regulatory head, who testified that PLDT is not qualified to buy a majority stake in Digitel because it is a foreign corporation. Globe based this claim on the Supreme Court (SC) ruling, which stemmed from a case filed by human-rights lawyer Wilson Gamboa.

Globe already filed a motion to suspend the hearings at the National Telecommunications Commission (NTC) last week on this ground. But the NTC ruled otherwise, noting that the SC decision is not yet final.

“In fact, several respondents in the Gamboa case filed their motions for reconsideration and other pleadings only late last week, which all the more proves that the SC decision is not final. Hence, it does not yet form part of Philippine jurisprudence on which to base the suspension of proceedings, much less the dismissal of the instant case. Fact is the NTC is not even a party in the said SC proceedings,” PLDT said on Monday.

Emmanuel Estrada, Globe’s network technologies strategies head, was the second witness.

He said that with the acquisition of Digitel, PLDT will have far more spectrum that it will need to carry out its operations and that the “excess” frequencies must be reviewed and rationalized to protect consumers and ensure a level playing field among the competitors.

At one point, Estrada testified that the 30-megahertz (MHz) frequency of Altimax Broadcasting Co. Inc. is part of Globe’s frequency bandwidth in the 2,500 MHz, which is being used for wireless broadband.

Through this testimony, PLDT lawyers were able to establish that Globe is illegally using the radio frequencies of Altimax Broadcasting Co. Inc. for WiMax purposes, which has not been authorized by the NTC.

“Globe’s witness also testified that Globe has acquired Altimax. This is quite a revelation since this acquisition did not go through the NTC and it seems that even Congress is not aware of this major transaction,” said Ray Espinosa, PLDT head of regulatory and policy affairs.

But Castelo said Globe had sought the NTC’s approval to “co-use” the frequencies of Altimax. “That is not true. The NTC approved this,” said the Globe lawyer.

Espinosa also said Estrada is not an expert and thus his testimony is doubtful. “For you to be an expert you have to be independent but he is an employee of Globe. Therefore, he is not qualified and competent,” Espinosa said.

Globe has been saying its frequencies acquired as against PLDT’s now stand at a ratio of 1:3.5 in favor of PLDT. This means Globe, with 26.5 million subscribers and 99 MHz, serves 268,000 subscribers with each MHz, while PLDT’s Smart Communications Inc. and Digitel’s Sun Cellular will have only 161,000 subscribers per MHz.

But Espinosa argued that PLDT’s share of frequency is commensurate to its number of subscribers. Smart, he said, has a total of 112.5 MHz, Globe has 90 MHz, and Sun has 42.5 MHz. “This is not ‘disproportionate’ given the respective subscriber bases of the three operators,” he said.

As of end-2010, Smart had 45.6 million subscribers, Globe 26.5 million and Sun 14 million.

Espinosa added: “The principal obligation of an operator assigned radio spectrum is to use that scarce resource as efficiently as possible in order to provide the public communications services, and we are the most efficient operator in the use of frequencies.”

Under NTC regulations, there are specific grounds that warrant the recall of an assigned frequency, which include: 1) the failure to pay an outstanding spectrum users fee after a reasonable period of time from due date; and 2) the non-use of the frequency assignment for one year. None of these conditions apply to PLDT/Smart.

“Given the points above, there is no basis in law for Globe to urge the NTC to recall and reallocate the frequencies currently assigned to PLDT/Smart. We applied for these frequencies and we’re using all of them. By what basis are they saying that we should return them? So if Globe wants additional frequencies, they must apply for them with the NTC,” Espinosa added.