Smart says third telco player’s PCC complaint meant to avoid liability

By Arjay L. Balinbin, Senior Reporter

GLOBE Telecom, Inc. on Tuesday said it recently requested the National Telecommunications Commission (NTC) to compel DITO Telecommunity Corp. to pay a P622-million fine for allegedly violating their interconnection agreement.

“The penalties were brought about by fraudulent calls placed through DITO’s network to Globe, bypassing proper voice traffic channels,” Globe said in an e-mailed statement. Its appeal was filed on Aug. 2.

Globe made the announcement on Tuesday after DITO filed competition complaints on Monday against the Ayala-led company and Smart Communications, Inc. of the PLDT group.

“An average of 1,000 fraudulent calls — identified as international in origin but masked as local calls — are allowed to pass through DITO’s network to Globe users every day, in violation of interconnect rules,” Globe said.

“The penalty covering one year, from July 2021 to July 2022, has ballooned with DITO’s adamant refusal to compensate Globe, defying provisions of its interconnect agreement on bypass traffic,” it added.

The company noted that reports of fraudulent calls continue to “illegally pass through” the third telco player’s network.

Globe wants the NTC to authorize its temporary disconnection of interconnection trunk lines with DITO until the latter has “taken positive and concrete steps to stop all illegal bypass operations emanating from its network and paid all its outstanding liabilities to Globe for fraudulent calls.”

“DITO has not only failed to compensate Globe, it also has not taken any serious actions to curtail bypass activities emanating from its network and terminating in Globe’s. Indeed, these bypass activities have not waned but have in fact continuously increased over the said period,” the company said.

It also noted that DITO’s “twin failures” to check such activities and pay the listed telecommunications company “what it is justly due have worked on a continuing serious prejudice against Globe.”

DITO Chief Administrative Officer Adel A. Tamano said in a separate statement that Globe’s position that interconnection will be done only if DITO pays for the alleged penalties “is an admission that they are making interconnection, which is mandated by law, subject to the acceptance of this alleged obligation.”

“Informing the media about these alleged interconnection penalties or ISR (international simple resale) is a disclosure of confidential business information that is a violation of the PCC’s (Philippine Competition Commission) rules of procedure,” he also said.

He pointed out that such calls are not made by DITO. “Rather, these are fraudulent calls made by third parties — and DITO is equally a victim of such calls.”

“Additionally, there are also ISR calls from Globe to DITO. It is not true that DITO has not taken steps to stop ISR calls to Globe. We have the data and the facts to show the steps undertaken by DITO to minimize these ISR calls.”

At the same time, the DITO official argued that the NTC is not a collection agency.

“If Globe has any monetary claims against DITO, [it] should go to the proper tribunal to enforce its claims,” Mr. Tamano said.

“Finally, let us reiterate that DITO Telecommunity is pursuing the case filed with the [PCC]. We are doing this to fulfill our mandate to provide true competition in the telecom industry and to ensure that the Filipino people are given world-class telco services they rightfully deserve.”

Roy Cecil D. Ibay, Smart Communications vice-president for regulatory affairs, said separately that it is “not engaged in any act constituting abuse of dominant position or anti-competitive behavior against DITO.”

“Simply false,” he said, referring to the reports about DITO’s claim that its subscribers “are not being allowed to interconnect with the Smart network.”

He also said that Smart and DITO have an existing interconnection agreement, which the former “continues to honor.”

“DITO is now requesting additional capacity, and has raised this via petition to NTC, where it is pending. DITO’s filing of the PCC complaint on the same subject-matter is blatant forum-shopping,” he continued.

At the same time, he pointed out that DITO should first “clamp down on its subscribers who have abused the interconnection framework to make fraudulent international calls to Smart subscribers under local rates.”

“Simply put, DITO has failed to prevent its network from being misused for fraud, with DITO SIMs masking international calls as domestic, resulting in huge monetary losses for Smart,” the Smart official noted.

The mobile network operator is willing to grant DITO’s request for capacity augmentation.

But DITO should “sign an agreement to compensate Smart fairly in the event that such fraudulent calls continue to proliferate,” according to Mr. Ibay.

“Otherwise, Smart cannot allow its interconnection arrangement with DITO to perpetuate fraud,” he said.

“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,” he added.

DITO has yet to respond to Mr. Ibay’s comments as of press time.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls.