PLDT to DITO: Pay P430M for construction transmission amenities

Instead of paying, Uy-led telco is ‘trying to confuse the public’

By Arjay L. Balinbin, Senior Reporter

THE PLDT group on Sunday said its demand of P429.7 million from DITO Telecommunity Corp. in relation to the construction of transmission facilities for the third telco player has nothing to do with the interconnection capacity issue.

“PLDT understands that [Smart Communications, Inc.] is unable to give DITO any additional bandwidth until DITO agrees to compensate Smart for illegal overseas call traffic that is coming from DITO and which defrauds Smart and the government of legitimate income,” PLDT, Inc. said in an e-mailed statement.

“This has nothing to do with DITO’s refusal to pay an overdue obligation to PLDT for transmission facilities that DITO has asked PLDT to build and which DITO has leased from PLDT and which, to repeat, DITO continues to use,” it added.

The company disclosed on Friday last week “DITO’s defaulted P430 million obligation owed to PLDT.”

According to DITO, “parties have initiated talks to amicably resolve this issue, but PLDT, in material breach of the dispute resolution mechanism under the parties’ agreement, still proceeded in pursuing this unreasonable claim.”

“Smart’s adamant refusal to augment DITO’s capacity (to interconnect with Smart’s subscribers) has to no small degree compromised DITO-SMART voice traffic, adding to the underutilization of the initial bandwidth capacity provided by Smart to DITO,” the third telco player said in a statement.

“Thus, DITO, in a series of letters to PLDT and prior to the delivery of the subject transmission facilities, informed the latter that the same are no longer needed,” it added.

PLDT described DITO’s response as confusing the public, as the third telco player was “referring to and mischaracterizing the issues involving DITO’s other unpaid obligations to Smart Communications, a separate company with a different agreement with DITO.”

“PLDT reserves all of its remedies in case DITO does not cure its latest major payment default within the applicable 30-day cure period, including the suspension or termination of services under the parties’ service agreement,” it added.

To recall, Globe Telecom, Inc. has requested the National Telecommunications Commission to compel DITO to pay a P622-million fine for allegedly violating their interconnection agreement.

DITO previously filed competition complaints against the Ayala-led company and Smart of the PLDT group.

“As for DITO, their debts will keep on piling up until they take action. A possible plan is to sell some of Dennis A. Uy’s companies to pay off debt or maybe China Telecom can give a helping hand,” Mercantile Securities Corp. Analyst Jeff Radley C. See said in a phone message.

Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said that if DITO and the wider Udenna group are currently facing a cash crisis, it is their obligation to the public to make this specific disclosure, for lenders and the wider capital market to be able to help them at this time.

“It does not help their case to create various scenarios merely to buy more time to settle their obligations,” he added.

Mr. Ridon pointed out that other Uy-led businesses are also embroiled in the non-payment of outstanding obligations, “such as the ruling by a Batangas court allowing Lucio Tan-led Absolut Distillers to collect P157 million from Phoenix Petroleum Philippines for the latter’s non-payment of bioethanol.”

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.

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