A  LUDICROUS  TELECOM  TALE

MANILA, JULY 31, 2006
 (STAR) HINDSIGHT By Josefina T. Lichauco - About two months ago, at a dinner, I was first told about a theory that the telecommunications demonopolization and liberalization process happened during the Marcos dictatorship, through what the purveyor of the ridiculous theory called "the demonopolization of handsets."

I am writing this article not only because the history of Philippine telecom dictates it, but, ridiculous as the theory is, the truth as it happened, has to be told, and the purveyor saved from the disgrace of being called an utter fool.

Jawaharlal Nehru said, "History is a record of human progress, a record of the struggle of the advancement of the human mind, of the human spirit, toward some known or unknown objective, and it has to be kept pure." Following the words of the great Nehru, this article is being written.

I did not feel like responding at first, for it was such a crazy notion it did not call for any rational comment or response. I wanted to laugh, but the purveyor was dead serious. I felt it important, however, to respond after I heard the purveyor talk about it, but I could not believe that this would lead to a good 10 minutes of nonsensical argumentation, which forewarned me that, for the sake of accuracy and truth, the purveyor had to be told that what he said was not only absurd and ridiculous, but untrue and impossible.

It is an incredible theory because everyone remembers that the Marcos dictatorship supported the preservation, in fact, encouraged the overwhelming strength of the virtual monopoly that the Philippine Long Distance Telephone Company (PLDT) was during the Marcos regime. And to say that it all started with the "demonopolization and liberalization of handsets" is as preposterous and ludicrous as they come.

I remember so well when the Philippines was being called the "new tiger cub of Asia," when a lot of country delegates in the global telecommunity became curious about Philippine telecom because of its remarkable standing in the international community.

This was highlighted by the visit to the Philippines of Dr. Pekka Tarjanne, the immediate predecessor of the incumbent secretary-general of the International Telecommunications Union (ITU). Dr. Tarjanne preferred then to spend his one-week furlough from two speaking engagements in Asia in the Philippines rather than in any other Asian country, before proceeding to Japan where he was the keynote speaker at a convergence conference. This was some time in the early 1990s.

I had arranged a courtesy call for Pekka Tarjanne with then President Fidel V. Ramos. There were no talking points or an agenda for the appointment, but I knew that Dr. Tarjanne was going to compliment then President Ramos for the enviable position of the Philippines in policy reform. We were, after all, at the forefront of the demonopolization and liberalization thrusts that the global telecommunity had accepted as a necessary step towards world telecom development and progress.

The Philippines had just overwhelmingly won a seat on the governing council of the ITU – the country’s voice was strong and whenever she spoke, the delegates took notice. It was, after all, President Ramos who had approved our demonoplization and liberalization recommendation after he took office as president. I remember that the Department of Transportation and Communications (DOTC), in collaboration with the National Telecommunications Commission (NTC) and the private sector, had drafted Department Order 87-188 which specifically spelled out how the country’s demonopolization and liberalization endeavor was to be initiated and implemented. This was done in 1987, but it was only at the inception of FVR’s term that our recommendations were accepted by the presidential office and the go-signal for its immediate implementation given by FVR.

This was a remarkable paradigm shift from the telecommunications situation during the Marcos tenure where the dominance of PLDT was nurtured. Note that PLDT, upon the commencement of the demonopolization effort, was a virtual monopoly accounting for about 94 percent of the telephone network in the country. If anyone has some crazy notion today that telecom demonopolization and liberalization happened during the Marcos dictatorship through the "demonopolization of handsets," this is not only laughable but also untrue.

The remaining six percent of the telephone network pertained to the small carriers, those local operators with local franchises operating in the provinces and the rural areas. They belonged to the PAPTELCO (Philippine Association of Private Telephone Companies). I used to call them the "Little Paptelcos" because during those pre-wireless telephony years, they provided the only means of access in the rural areas. They were inevitably called "Mom and Pop affairs," but no matter how familial these telephone enterprises were, they were heroes. No matter how difficult their financial conditions were, they heroically provided the only means of access in the rural areas. And they owed the dominant carrier a great deal of money since they were, of course, accessing the only backbone or mainframe in the country which was PLDT.

This was the telecom environment existing in 1987 soon after the peaceful revolution of 1986. If indeed the demonopolization of handsets happened during the Marcos dictatorship, then that’s fine and good, but this in no way caused the emergence of the new carriers like Globe Telecom, Smart Communications, Digitel, Bayantel etc. within the context of a competitive environment that exists up to this day.

In no way could a flimsy demonopolization of handsets/equipment paraphernalia, which used to originate from one source, then became liberalized, have led to the birth of the new carriers. The authorizations to the new carriers were granted by the NTC after their franchises were issued by Congress.

The emergence of new carriers like Globe and Smart, within the context of a still extremely strong PLDT, occurred more than a decade after the so-called demonopolization of handsets.

It is important for us to take note of this because telecom history is still writing itself right now. We see a telecom sector today that is the country’s most profitable and exciting sector from the point of view of net income outpacing the banking, manufacturing, real estate and retail sectors of the commercial world. And, at the rate the telecommunications and information technology sectors are growing and the new technological innovations capture the interest of the commercial world, there seems to be no end to its growth.

More than anything, we see a competitive environment gradually thinning out to most likely three strong competing players. We see the mobile communications sector producing mind-boggling innovations – the 4G technology materializing the so-called three-screen convergence, bringing together TV, PC and mobile phone screens into a single portable device.

These screens, perhaps the most notorious technology icons of our time, are viewed and scrutinized by billions of people worldwide, mostly in their homes, their offices, and gradually, on the move, as they walk and as they run.


Chief News Editor: Sol Jose Vanzi

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