Rant| And the Sun will keep Shining


Thanks to its 24/7 unlimited texts and calls feature, Sun Cellular has been under fire from the two large mobile heavyweights in the Philippine market. Using their lesser known subsidiaries, Globe Telecom and Smart Communications have filed petitions with the National Telecommunications Commission for it to stop Sun from offering the 24/7 feature, claiming that Sun is engaging in predatory and discriminatory pricing.

Nice try. But it’s going to take more than that for the two major players to cause a fiery Sun-set. For one thing, it’s difficult to prove predatory pricing when intra-network calls and texts merely run on fixed costs — whether or not Sun offered its 24/7 feature in the first place, it will still be incurring the same network costs anyway… and the same goes for the other telcos as well.

In fact, predatory pricing as an argument only works if Sun was a market leader that dropped its prices below cost to kill competition. But not only is Sun not a market leader (and that’s an understatement), but it actually became even more profitable via its launch of the 24/7 program! (Well, okay, they’re still incurring losses at the moment, but it’s now far less than before.)

So perhaps the real question we should be asking is: why are the big telcos still charging us one peso per text message in the first place?

Speaking of which, here is the irony of the suits: if we limit our discussions to SMS alone, just last year the Supreme Court ruled in favor of the two largest telcos against the NTC. In brief, the Supreme Court agreed with the two large players that the NTC had no right to regulate SMS messaging because it has yet to prove that SMS was a value-added service in the first place.

And yet these same telcos are now begging the NTC to regulate Sun’s unlimited services. Ha ha.

But that’s business for you. Bottom line? They can try to make Sun go belly up (Sunny side up?), but they’ve got to make their arguments more convincing. Better yet, maybe they can just drop their prices and compete the fair market way…

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Reader Comments

Wow, poetic justice. Serves greedy Smart and Globe right. They are just pissed at SUN because it has an offer they cannot beat. Good work sun cellular. Competition is always better for consumers.

If one is to look at the events very closely, it’s really not SUN the two telcos are after, it’s the NTC. You see, the NTC, stopped the two telco’s momentum, when they were about to release their own “unlimited” service. This was when “small” telcos from the provinces, complained of predatory pricing from the “big 2″, now they would rather put the NTC, in a fix after destroying their “thunder”.

Even though SUN might sound like their trying to monopolize the mobile communications, I still think GLOBE and SMART should not be alarmed and worried! :) SUN still has a long way to go in order to compete with these two titans.. Even if people have a SUN SIM, they still have their beloved GLOBE or SMART SIM with them as their “primary” number.. True, they may have loses but at least they won’t totally lose them to SUN! :) However, they should be alarmed if SUN will have numerous cellsites to provide a strong signal to everyone in the Philippines and accompanied with great mobile services! That’s the time that they should be worried.. :p