It costs about $25 per month to make unlimited calls within one's area code in the States. In India, it costs 1 US cent per minute. Globe and Smart propose about 10 US cents per minute which is just about what my sisters in San Francisco are paying when they make overseas calls to RP on their prepaid phone cards.

what Sun Cellular did was expose that the same services (local mobile voice calls and SMS) can actually be provided at a cheaper price. No wonder Globe and Smart are really raking it in for nearly a decade. Let's face it, Globe and Smart are not really transparent about their capex declarations, which serve as one of the grounds to justify their rates for voice calls and SMS to fall under the return-on-rate base (RORB) regulations of the National Telecommunications Commission (NTC). RORB is where a price of a certain regulated service is set by the gov't. to allow a regulated firm to recover its capital plus margin. the problem is, we will never know (and perhaps never see the end of) the true extent of service coverage throughout the country, and the real amount of invested capital needed for complete nationwide coverage that these two operators will surely need payback for by way of regulated rates (and obvious market protection from competitive pricing) for the services they provide. Now, you see why Globe and Smart are complaining.
the NTC must have the expertise to discern any constant and padded capex claims by these two dominant telecom companies. Otherwise, essential services like mobile voice calls and SMS will always fall under a regulated pricing scheme that is not truly reflective of the real investment costs that these firms will always want to recover. However, the NTC is not capable and not well-resourced in verifying the capex declarations of companies in a regulated industry such as the telecom industry. NTC is dependent on information on capital costs firms in the industry keep as a closely guarded secret, because it is after all a profit-oriented business. thus, we will never know when the time will come for competition to take place in the telecom industry. what we have is just a semblance of industry competiton in terms of number of competing firms, but not competing in other aspects of competition like prices.
while the telecom business is a capital-intensive undertaking where only a few firms are capable of competently entering the industry, such industry structure will surely invite government intervention to preclude any firm from exercising market dominance to the detriment of public interest. the ideal solution is to enable government to effectively regulate the industry. Yet, this is easier said than done given the realties of our present govenrment.
on the issue of sun cellular being accused of unfair competition, i guess the simplistic resolution is for the NTC, as government regulator, to sustain sun cellular and set the rates for mobile voice service and SMS a little above the rate of what sun cellular currently charges since this is a good indicator of the best practice approach to determining the rate closest to cost of service provision following the premises/rationale of the RORB regulation.

Sun Cellular would be a guilty if it was a major player in the telecommunications industry. Yet it is not, it barely comprises 1-3% of the total market for cellular services.

Globe and Smart are simply conniving so as to maintain their rates.

i don't think sun is in voilation of anything. it's all part of the game. you have to find legal and better ways that can attract customers from consumers by providing better products or services.

it's not like they're monopolizing anything you know...

plus, correct, they exposed the potential picture of how big the profits that globe and smart are raking in...

no wonder they can afford to give up to an 18th month pay or something for their employees!

Twenty...

Giving 18-20 months of pay at a smaller monthly salary is not because they have lots of money - more of a strategy to attract good employees.

But yes they still have lots of money hehe.

of course, sun might be risking itself with this strategy once they experience network congestion.

globe had to start charging their once free text messaging service around 5 yrs ago due to complaints of late received messages...

i wonder how sun plans to counter that once they get too many subscribers...

They don't think have to adjust. For 300 bucks a month 24/7 - kahit sobrang bagal or may lag im pretty sure people will still use it.

True. Let the consumers decide. Sun Cellular will self-destruct if they did not prepare for network congestion which 24/7 will cause. Maybe they know Filipino culture better than Smart and Globe. Filipinos will use a service which is still substantially cheap despite the hassles. Basta makakatipid di ba?

pero this price war is also what differs the telecom industries from one another. parang lumalalabas na it's a battle between quantity and quality because being a successful company can be defined as having many consumers (like Sun is trying to be) or having the best products and services (like Smart and Globe has already been). Actually, it may all seem very strategic for Sun but basic economic sense will tell you that as long as the battle is waged against price, the industries themselves are sealing their own fate.

Kapag nagcollapse ang mga telecoms na ito, we will also suffer. Mas bababa uli ang kalidad ng pagtawag at/o pagtext dahil sa nagbababaang presyo. Or, it is also possible that in order to maintain the same level of quality, the firms will raise the prices.

Of course, sino bang ayaw makatipid di ba? Pero we have to be reasonable in being too thrifty. If low quality is to be compromised with low prices, then it is your game.

I was one of the first subscribers to Sun Cellular way before they introduced their 24/7 promotion. I switched from another telecom because Sun offered the best prices at the time (P0.50/SMS and P6.00/min). I admit that the signal at first was kind of crappy. In the middle of the Ortigas CBD, there would be numerous blind spots. Heck, even within the Shangrila mall, the entire Rustan's department store was without signal. I stuck it out because I know the service would only get better. Such is the growing pains of new players (I know someone who is still on Plan 0 on Globe).

Eventually, the service improved and signal reception was better (roaming was still crappy though - they did not have service in Australia and had to buy a Globe prepaid just to roam for a year). With the introduction of 24/7, I found that it was harder to get voice calls through the network and SMS comes out delayed. I did not subscribe to 24/7 because after doing calculations on my monthly usage, it would not be financially beneficial (kuripot ako, e), but because of this promo, service took a step back. I believe, however that this is also part of the growing pains of a corporation and things can only improve. If they do not, customers like myself will abandon their service in favour of ones we perceive to be better.

So where does this all lead to? I don't think Sun Cellular is guilty of unfair competition. I think Globe and Smart were just acting like spoiled brats when a new kid on the block they monopolised for the longest time comes in with a new toy and gets some playmates away from their gang.

Although up to now, I haven't quite seen an industry collapse because of a price war. If anything, it was just that some old, well-entrenched players shut down and new players emerged. This is what's happening in the worldwide airline industry where traditional players like United have either closed or restructured their operations, but new players like JetBlue have emerged. At the end of the day, this will result in a healthier and more efficient business environment where consumers and employees, and not the oligarchs, end up as winners. Competition, instead of public policy, is also a more natural and sustainable way to fight inflation and improve productivity.

Except often stuff like antitrust policies, policies to disseminate information and educate/protect consumers, etc. are required as the institutional foundations that encourage the "natural" development of "perfect competition," at least insofar as the theoretical conditions of perfect competition can actually be achieved in the real world.

Hey, why did the discussion stop? I was enjoying the nice exchange here.

My two centavos from a nascent telco perspective: Sadly, there will never be a scenario/milieu of "perfect competition." Moreover, conditions in the Philippines are too out of whack for us to expect a pain-free transition into a fully deregulated economy. That said, as early as now, a telco has to strike the balance between judicious capex and opex, while at the same time squeezing from its consumers the lowest possible margins.

I smile when I think of how the biggest players tend to bully their way around our piddling market though. They probably realize how burdened they are with their legacy technologies that it's become their life's mission to hamper, delay and obstruct the entry of smaller, albeit more nimble, market entrants.

Is this my cue to reply?

natatawa ako sa globe and smart, lalo na sa smart. kesyo hindi raw sila apektado sa 24/7 ng sun and yet they came up with their own supposed original idea na 25/8. but now, pareho nang nag stop promo nila.

in my opinion, sun is giving back what the consumers should have had in the first place. and that is an option to choose. kasi between smart and globe, wala naman masyadong pagkakaiba eh. sun came in and brought competition back and these 2 bigger players are suddenly crying foul.

sun's services are getting better lately. mas nakakatawag na compared to before. un na nga siguro ung effect ng P 200M++ worth na mga stuff na binili nya to improve their service.