It Will Not Be Business As Usual For Our Telcos

Wazzup Pilipinas!

Akbayan Senator Risa Hontiveros on Tuesday called for greater accountability and transparency from telecommunications firm Smart Communication Inc. regarding the renewal of its franchise and the nature of its ownership.

Smart Telecommunications, a subsidiary of the Philippine Long Distance Telephone Company (PLDT), was awarded its legislative franchise on March 27 1992. This franchise allowed Smart to operate for 25 years and is set to expire on March 27 2017. Republic Act 7925 stipulates that no telecommunications firm can operate without a franchise from Congress and a Certificate of Public Convenience from the National Telecommunications Commission (NTC). As part of the conditions of the franchise, Smart is also obligated to offer at least 30%of its stock to the public. As of this writing Smart has not complied. For its part, Smart contends that since its parent company is a publicly listed entity it no longer needs to fulfill this condition.

Smart and PLDT have separate registrations under the Securities and Exchange Commission (SEC).

There are currently two bills that seek to renew Smart’s franchise for another 25 years, one in the House and one in the Senate. Each of these Bills not only seeks to renew Smart’s franchise but also grants them seemingly favorable terms, specifically on foreign ownership and the ability of a parent company to list itself on behalf of a subsidiary.

The Philippines currently has the slowest internet speed in the Asia-Pacific. Among the reasons cited for the country’s poor internet performance is the lack of other providers and the fact that only one company controls much of the country’s infrastructure.

“It cannot be business as usual for our telcos. We call on Smart to fully comply with the terms of its franchise and to be more transparent about its corporate structure and ownership,” Hontiveros said. “We will not allow Smart’s subscribers to held hostage to inferior service while paying fees that are comparatively higher than many of our Asian neighbors,” Hontiveros said.

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