Smart, Globe fire back at ‘anti-competitive’ complaint; DITO denies forum-shopping

Smart Communications Inc. and Globe Telecom Inc. have fired back at DITO Telecommunity Corporation after the new major telecommunications player filed an anti-competitive complaint against the dominant firms.

DITO filed the complaint before the Philippine Competition Commission (PCC) on Monday, citing interconnection issues with Smart and Globe and accusing the two companies of abuse of dominance.

In a statement, Smart vice president for Regulatory Affairs Roy Ibay called DITO’s filing at the PCC “blatant forum-shopping,” as Dito has a request pending with the National Telecommunications Commission (NTC) for additional interconnection capacity.

In response, DITO chief administrative officer Adel Tamano said that “there is no forum-shopping in this case as the petitions with the NTC are for violations of the Telecom Policy Act and the corresponding NTC Memorandum Circulars.”

“The complaints with the PCC are anchored on violations of the Philippine Competition Act for abuse of dominant position. Two very different causes of action, with different tribunals, which have distinct jurisdictions,” Tamano said.

Globe, meanwhile, said in a separate statement that Dito refuses to compensate it for interconnection violations, and that its “debt to Globe has continued to increase even as it petitioned the NTC for additional interconnection capacity despite continued breach of our agreement.”

Globe is asking the NTC to compel DITO to pay P622 million in interconnection penalties due to fraudulent calls—identified as international in origin but masked as local calls—placed through DITO's network to Globe, bypassing proper voice traffic channels. 

In its latest statement, the Ayala-led telco said DITO’s debt increases by P2.5 million every day, with an average of 1,000 fraudulent calls detected daily.

Tamano stated on Tuesday that the calls are not made by DITO; that “rather, these are fraudulent calls made by third parties—and DITO is equally a victim of such calls.”

Ibay also said Smart’s monitoring and fraud detection systems were able to track and block illegal calls emanating from DITO.

“Smart reiterates its willingness to grant DITO’s request for capacity augmentation, provided that it signs an agreement to compensate Smart fairly in the event that such fraudulent calls continue to proliferate. Otherwise, Smart cannot allow its interconnection arrangement with DITO to perpetuate fraud,” Ibay said.

To this, Tamano responded that “Smart has taken a similar approach as Globe in regard to their position on the Philippine Competition Commission complaints that DITO filed.”

The DITO official reiterated that the fraudulent calls in question were made by third parties.

“Additionally, there are also ISR (International Simple Resale) calls from Smart to DITO. It is not true that DITO has not taken steps to stop ISR calls to Smart. We have the data and the facts to show the steps undertaken by DITO to minimize these ISR calls,” Tamano said.

Globe, however, said that in the interconnect agreement, DITO is accountable for bypass traffic committed by a third party using its network.

Globe added that it is entitled to bypass compensation as the "aggrieved" party.

'Baseless complaint'

Ibay, for his part, said that DITO has failed to prevent its network from being misused for fraud, with DITO SIMs' allegedly masking international calls as domestic resulting in huge monetary losses for Smart.

“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. 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,” Ibay said.

To this point, Tamano responded that while PLDT built a big part of its telco infrastructure, “this was paid for by DITO.”

“It was not done gratis et amore (in exchange for nothing). And the building of that infrastructure was done in compliance with the legal mandate for interconnection and not to help DITO fulfill its commitments to the NTC and Congress,” Tamano said.

At a press briefing on Monday, Tamano said that at the current grade of service, only 30 out of 100 calls made from Dito are able to connect to one network, and only 20 are able to connect to the other. 

Citing NTC guidelines, Tamano said that out of every 100 calls only one call should not be able to interconnect. — BM, GMA News