THERE is an interesting subtext in the opposition of the Philippine Long Distance Telephone Co. (PLDT) to the corporate rehabilitation of financially strapped Bayan Telecommunications Inc. (Bayantel), and its subsequent petition for the auction of certain frequencies of the latter. Interestingly enough, the ongoing courtroom battle over it has spawned a host of other issues that were unwittingly exposed and which unerringly showed a better perspective of the real issues at hand.
One of these issues, it would seem, is the ascendancy of Bayantel as a worthy competitor in the industry, thanks, in part, to Globe Telecom’s conversion of the Lopez-led telecommunications company’s (telco) debts, which the Ayala-led firm had acquired. Bayantel has been financially hemorrhaging because of these debts. The fact that the telco could bring into battle its tie-up with its sister company ABS-CBN 2 is, analysts say, the reason for the opposition of PLDT, which, unfortunately, has been losing customers.
Another issue is the legality of PLDT’s own acquisition of Digital Telecommunications Philippines Inc. (Digitel) and, before that, of Smart Communications. As PLDT pointed an accusing finger at Bayantel’s corporate rehabilitation and listed the reasons for its opposition, the telco, however, failed to take into account that it was supposed to be subjected to the same kind of scrutiny that it now hurls at the Lopez-led firm’s rehabilitation.
What PLDT was questioning was the supposed need of that rehabilitation to get congressional approval, since it supposedly involved merging Globe and Bayantel. However, as Globe earlier announced, it and Bayantel would not merge, and that the Lopez-led company would continue to exist separately. PLDT had banked on its interpretation of the congressional franchise that Bayantel got through Republic Act (RA) 7633, which was approved in July 1992.
Interestingly enough, the franchise that Bayantel got required it to go to Congress only when a transfer of the franchise is involved. In the franchises that Digitel and Smart had, as espoused in RA 7678 and 7294, respectively, the need for congressional approval surfaced when there was a change in controlling interest. In the case of these two telcos, there was such a change, as PLDT became the majority owner.
Hence, PLDT has to surmount its very own legal challenge against Bayantel for its earlier acquisitions that went through without so much as a congressional clamor for it to seek a new franchise, as spelled out in both the provisions of the laws that granted the franchise to Smart and Digitel. While no franchise transfer was involved in PLDT’s acquisition of Smart and Digitel, there was a change in controlling interest in both companies.
Thus, PLDT has unwittingly exposed its vulnerability to a congressional challenge. Someone has to take PLDT to where it wants Bayantel to be. That would be karmic justice, since more than 1,000 Bayantel will be rooting on the sidelines of the expected congressional hearing, complemented by a horde of Digitel employees who are questioning their being laid off because of redundancy.
BSP should go for EMV cards
THE huge losses that bank depositors have incurred because of easy-to-copy automated teller machine (ATM) cards should make the Bangko Sentral ng Pilipinas (BSP) worry. What’s needed is the so-called Europay MasterCard Visa (EMV) ATM card, which is now the global standard for the prevention of card-skimming, which has victimized many depositors.
No less than Rep. Roman Romulo of Pasig City has sounded the alarm on this matter when he said nearly P400 million were lost to 2,872 cases of ATM fraud—mainly card-skimming—from 2012 to 2013. Card-skimming can be easily done in today’s ATMs due to the easy copying of a cardholder’s personal identification number (PIN) and other details in his or her card.
Citing BSP figures, Romulo said that, in 2013 alone, some P220 million in deposits were stolen because of the proliferation of illegal PIN-capturing devices on ATMs. He said this amount was P45 million, or 26 percent higher than the P175 million in deposits ripped off in 2012 because of the covert copying of information from the magnetic strip of an ATM card. Clearly, because of these big losses, the BSP would have to embrace EMV cards sooner.
Meanwhile, the move of Electronic Network Cash Tellers (Encash), a private deployer of ATMs, to be the first to fully comply with the use of the EMV chip cards come January 2017 should be lauded. The board of directors of the company—which has more than 300 ATMs nationwide, many of which are in the hinterlands—also deserve high praise, for it has already approved Encash’s adoption of the EMV.
Encash is also moving toward its attaining Payment Card Industry-Data Security Standard certification as part of efforts to ensure that its ATM users are protected from card-skimming. The forward-looking company earlier passed Visa card standards, allowing foreigners with Visa cards to withdraw from its ATMs.
E-mail: hugagni@yahoo.com.
