October 20, 2004 (STAR) By Wilson Lee Flores - "By competition the total amount of supply is increased, and by increase of the supply a competition in the sales ensues, and this enable the consumer to buy at lower rates.

Of all human powers operating on the affairs of mankind, none is greater than that of competition." – legendary US Senator Henry Clay (1777-1852)

Are the days of free texts and unlimited cell phone calls coming soon for Filipino consumers? So that hopeless text addicts can spend more on books, movies, music, sports and other alternative entertainment.

There’s no more need to fear new taxes for SMS text messages proposed by the World Bank, that it will increase the text costs for us consumers, because the market forces of fierce competition may hopefully bring down text costs starting with Sun Cellular’s incredible 24/7 strategy soon offering unlimited texts and calls. Our politicians and the government have failed to put some sense into the wild, wild west-like industry of telecommunications, with telecom firms raking in so many mind-boggling billions of pesos in net profits at the expense of other economic sectors, but market forces may be coming in to rationalize the whole industry and benefit all of us consumers.

The Philippine telecom industry is an oligopoly now being threatened with havoc by the upstart Sun Cellular not wanting to be a far No. 3 to Smart and Globe. An oligopoly is a market sector in which there are few sellers. In the Philippines where the national government is weak, where many politicians have for decades been shamelessly opportunistic and blinded by narrow self-interests, many oligopolies, monopolies and mismanaged state-controlled firms have been allowed to become inefficient deadweights on the national economy and to disadvantage us the consuming public.

Whatever his public claims may be about his retirement, rags-to-riches taipan John Gokongwei Jr. seems to be the clever mastermind behind upstart Sun Cellular mounting a possible scorched-earth war strategy versus traditional giants Globe Telecom (controlled by the Hispanic Zobel-Ayala clan and regional behemoth Singapore Telecom led by Premier Lee Hsien Loong’s younger brother Lee Hsien Yang) and Smart/PLDT (led by Wharton-trained Manny Pangilinan and controlled by Hong Kong-based First Pacific Group). Upping the ante in the bitter telecom war that once mainly pitted Smart/PLDT versus Globe/Ayala, industry late-comer Sun Cellular has nothing to lose but its small market share when it recently announced bold plans to offer Sun Cellular subscribers unlimited texts and calls 24 hours daily seven days a week for only a minimal monthly charge.

We hope that this brash strategy of upstart Sun Cellular will force Smart and Globe to follow suit: offer us consumers better deals, more perks, improved services, more freebies and ultimately lower costs. With lower costs on text messages, it is our sincere hope that the many billions of pesos in new savings for consumers will benefit other industries – more disposable incomes for education, entertainment and sports.

We hope that consumers who will spend less on text messages will buy more books, magazines, newspapers, watch more movies, buy more music, indulge in more sports, eat better food and pursue a better quality of life.

Politicians Failed To Protect Us

In Text Boom Our politicians seemed to have abdicated on their public duty to safeguard the public welfare on the issue of excessive telecom firms’ profits due to lack of political will, vision and possibly even lack of social conscience. The state’s failure is not due to its laissez faire attitude of allowing free market forces free reign to the Philippine market, but simply due to impotence and myopia. The state and political elite of the Philippines have failed to guide the business sector on where to wisely invest the nation’s scarce capital for true national progress.

Will Sun Cellular throwing down the gauntlet with its 24/7 strategy lead to reduced but still good profits for telecom firms, forcing these smart business leaders the Zobel-Ayalas, Manny Pangilinan/First Pacific and even Gokongwei himself to search for other new business investments that will truly create more jobs, generate more social good, improve quality of life and push sustained Philippine economic progress?

If there are no reforms or no major shake-up in the telecom sector, the incredible bumper crop of multi-billion pesos profits every year will most likely be reinvested in more cell sites and bigger marketing campaigns which create much less jobs than basic manufacturing industries, tourism establishments or agri-business ventures – industries the Philippines badly needs today to get out of economic crisis and soar upwards.

The US is a genuine democracy not just politically, but economically. They have strong anti-trust laws that allow wise and courageous political leaders to forcibly break up monopolies or oligopolies, which harm the whole economy and society. Their system favors free competition, not monopolies or oligopolies. Every citizen of our Philippine democracy should uphold a level playing field for all industries; promote robust free enterprise; and healthy competition to guarantee a win-win situation for all.

Will the upstart Sun Cellular’s campaign do to the telecom oligopoly what Gokongwei’s Cebu Pacific Air did to Lucio Tan’s Philippine Airlines and what GMA 7 did to ABS-CBN 2? Will it force the once invincible traditional industry leaders to humbly lower their prices, improve quality, reinvest, increase the pay of their employees and upgrade their services to benefit all of us the consumers?

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Thank you to the Catholic Mass Media Awards (CMMA) for honoring this column as "Best Business Column." Comments or suggestions are welcome at wilson_lee_flores@yahoo.com or wilson_lee_flores@hotmail.com or wilson_lee_flores@newyork.com or P.O. Box 14277, Ortigas Center, Pasig City.

Reported by: Sol Jose Vanzi

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