Inefficient

The other thing the President talked about upon his voluntary repatriation was the PLDT-Digitel merger.

Well, to be fair, he did not really talk about it. He simply said he is in receipt of a voluminous report (about half an inch thick) from groups opposed to the merger.

Since there were many “technical aspects” in that report, he (as usual) passed it on to the National Telecommunications Commission (NTC) and the Department of Science and Technology (DOST) for further review.

He might have meant the Department of Transport and Communications (DOTC) and not the DOST. The DOST does our meteorology and volcanology, not our information technology. But the DOTC, despite that department’s name, has shown very little interest (and very little competence) in communications. Maybe the President should have assigned the matter to his overstaffed “communications group” since this band of co-equal secretaries does not (by the President’s own assessment) do enough work anyway.

At any rate, the President remembered that he “learned in school that monopolies are inefficient.” He must have been absent the next day when the lesson was: Two Competitors Does Not a Monopoly Make. He must also have been absent the third day when the lesson was on Natural Monopolies such as Meralco and the NFA.

And what did the President learn about “monopolies’? Further to the PLDT-Digitel merger, the President said that the frequencies used by the now merged communications companies were “adjacent” to each other, giving them “undue advantage”.

Again, he must have misspoke. He must have meant “efficiency” instead of “undue advantage.” Efficiency could hardly be confused with “monopoly.” Efficiency brings down costs and benefits all consumers.

In the telecoms sector, efficiency is measured by the number of consumers served by the amount of radio bandwidth granted the franchise.

PLDT-Smart has a total of 113MHz of radio spectrum serving 45.6 million subscribers. Globe has 90 MHz serving 26.5 million subscribers. Sun has 42.5 MHz serving 14 million subscribers.

This translates into pretty revealing operator efficiency by dividing the bandwidth allocation by the number of subscribers. Smart has 403,000 subscribers per MHz, Sun has 330,000 and Globe only 294,000. Yet it is Globe demanding that government allot more spectrum to it, away from Smart and Sun.

Bandwidth is finite; the number of potential subscribers infinite. Should government now reallocate more bandwidth to the most inefficient user in the name of some windmill called “monopoly’? All consumers should be interested in greater efficiency and lower costs.

The President does not need the “DOST” to grasp that — nor dig up his college notes. –Alex Magno (The Philippine Star)