A public policy think tank that is known to have sided with smaller players said it found Dito Telecommunity Corp.’s claims to be of “no relevance to public interest.”
Infrawatch Convener Terry Ridon said Dito’s antitrust cases against Smart Communications Inc. and Globe Telecom Inc. are “baseless,” saying that interconnection, international simple resale (ISR), network security are “interrelated concerns, obligations and transactions of telecommunications companies.”
“The failure of any telco to stop or limit ISR gives other parties the right to refuse to deal with non-compliant contractual partners, as it compromises network security and integrity,” Ridon said. “In order to show an abuse of dominant position, there needs to be a showing that transactions are subject to other obligations that have no connection with specific transactions.”
Dito sued both Smart and Globe for allegedly violating the Philippine Competition Act, specifically the provisions that pertain to abuse of dominant positions.
Dito claimed that its competitors violated the law 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.
Adel Tamano, Dito’s chief administrative officer, earlier claimed that the two telcos were demanding commercial concessions from Dito before they increase the interconnection capacities provided to enable smooth internetwork calls.
“In the case of interconnection and ISR, telcos should not be made to expand interconnection agreements with competitors who fail to stop or limit fraudulent calls to other networks, as expanding interconnection without curbing fraud will only increase the likelihood of more fraudulent calls at scale,” Ridon said.
“As such, it is incorrect to say that interconnection transactions are being made subject to obligations which have absolutely no nexus to interconnection.”
Both Globe and Smart have filed cases against Dito before the National Telecommunications Commission (NTC) asking the regulator to compel Dito to pay fines due to the fraudulent calls from Dito’s network.
Globe claimed that an average of 1,000 fraudulent calls from Dito’s network is detected daily. Dito, Globe Group General Counsel Froilan Castelo said, has “persistently ignored calls for payment” even though compensation is clearly stated in its interconnect agreement with Globe.
“These illegal calls clog the network to the detriment of our customers. We need to take utmost caution as ISR calls also carry the risk of exposing our customers to vishing or voice call scams,” he said.
In Globe’s case, Dito is said to have owed Globe P622 million for the fraudulent calls. This amount increases by P2.5 million daily until the issue has been resolved.
Smart, for its part, echoed Globe’s sentiment, with Smart VP for Regulatory Affairs Roy Ibay saying that Dito’s network is being used for fraud.
“Simply put, Dito has failed to prevent its network from being misused for fraud, with Dito SIMs masking international calls as domestic, resulting in huge monetary losses for Smart,” said Ibay.
He also called the PCC petition a case of “forum shopping.”
“It is a disturbing development that while Smart continues to interconnect with Dito despite these outstanding issues and while we were still negotiating with Dito on a bypass agreement, Dito now attempts to avoid liability for these fraudulent international calls by filing a baseless complaint with the PCC accusing Smart of anti-competitive behavior,” Ibay said.
“It should have instead acknowledged that PLDT, Smart’s parent company, was instrumental in helping Dito fulfill its commitments to the NTC and Congress as a third telco, considering that PLDT built for Dito a big portion of its telco infrastructure.”
However, both Globe and Smart noted that the interconnection agreements they signed with Dito are still in effect. They also signified their “willingness” to augment the interconnect capacity, provided that Dito pays up for the fraudulent calls from its network.
Tamano noted, however, that the cases before the antitrust body are meant to ensure that there is “true competition” in the market.
“[L]et us reiterate that Dito Telecommunity is pursuing the case filed with the Philippine Competition Commission to fulfill our mandate to provide true competition in the telecom industry and to ensure that the Filipino people are given world class telco services that they rightfully deserve,” Tamano said.