Eastern Telecommunications Philippines Inc. (ETPI) has called on the National Telecommunications Commission (NTC) to audit the telecommunications and other government infrastructure concessions controlled by the First Pacific group to ensure the prevention of anticompetitive behavior.

Citing the agency’s Competitive Policy, ETPI said market share is widely considered as the most transparent indicator of dominance or significant market power. A market share of 40 percent, it added, gives rise to a presumption of significant market power, while a market share of less than 25 percent is deemed insufficient for a player to behave as if it were unaffected by market forces.

ETPI is among the groups opposing the planned acquisition by Philippine Long Distance Telephone Co. (PLDT) of Digital Telecommunications Philippines Inc. (Digitel). It submitted its opposition to the proposed transaction to the NTC last week.

If the PLDT-Digitel deal is approved by the NTC, ETPI said, it would result in the PLDT group having significant market power by virtue of its control over Smart Communications, Smart Broadband Inc., Connectivity Unlimited Resource Enterprise Inc., Digitel and Digitel Mobile Philippines Inc., the cellular unit of Digitel.

It noted that the group “will acquire a commanding 70-percent market share of the entire suite of telecommunications services currently being offered on the Philippine market.”

This ranges from cellular mobile communications, local exchange carrier services, interexchange carrier services, international gateway facilities, fixed and wireless broadband services, and value-added services, it said.

ETPI said the NTC should impose conditions to ensure the prevention of anticompetitive behavior.

“Likewise of importance is the control of the PLDT combine, its related companies and affiliates of various other companies and facilities…and government infrastructure concessions,” it added.

The company cited Manila Electric Co. and its subsidiary, e-Meralco Ventures Inc., which own and lease out significant fiber optic cables in areas where Meralco operates, as well as telecommunications-related assets such as poles, and the Subic-Clark-Tarlac Expressway and North Luzon Expressway.

“Related companies and affiliates of PLDT will, therefore, be in a position to restrict access by competitors…to such telecommunications-related facilities,” ETPI said.

It also pointed out that the PLDT group will effectively control six out of the existing seven international cable systems that carry outbound voice and data traffic, and four out of the current five cable-landing stations, where such undersea cable systems terminate on Philippine land.

As a result, the PLDT group “will be in a position to discriminatorily price the capacities of its international cable-landing stations and…restrict access to the landing stations or charge discriminatory prices for such access,” ETPI said in its filing with the NTC.

It added that the PLDT group’s dominance will also extend to a commanding control of Internet exchanges and local Internet peering, which is an arrangement of traffic exchanges between Internet service providers.

As a result of the transaction, ETPI said the PLDT group will have the largest Internet exchange in the country in terms of membership and, with its command of very extensive telecommunications facilities, “will be in a position to restrict access to locally hosted content by deliberately disallowing traffic from competitors to pass through its network.”

The NTC has yet to schedule another hearing before it issues a decision on the proposed deal.  --L. Lectura