telecommunications companies

PLDT to Dito: Pay P429 million or we’ll cut off service deal

Ralf Rivas
PLDT to Dito: Pay P429 million or we’ll cut off service deal
Dennis Uy's Dito Telecom is facing another complaint from its competitors

MANILA, Philippines– PLDT is demanding Dito Telecommunity to pay P429 million in service fees that the third telco player refuses to settle.

In a stock exchange filing on Friday, October 7, the Pangilinan-led PLDT sent Dennis Uy’s Dito a notice of material breach and demand for payment relating to the building and provisioning of transmission facilities that Dito is currently using for the delivery of telco services to subscribers.

PLDT said that Dito has 30 days or until November 4 to pay up.

Failure to do so will force PLDT to “exercise all of its rights under law and contract to protect its interests” and may mean suspension or termination of the service agreement with Dito.

Should PLDT terminate the service agreement, does this mean that Dito subscribers won’t be able to contact Smart users?

PLDT said “that will not happen if Dito uses alternative transmission facilities.”

Misleading?

In a strongly-worded response, Dito said that PLDT’s disclosure to the Philippine Stock Exchange was “misleading.”

Dito explained that its deal with PLDT and its affiliate Smart Communications was for the obligations of the companies under the interconnection agreement. Laws specify that all networks must be able to send and receive messages from one another.

Dito claimed that Smart is refusing to add more capacity.

Recall that Dito said that only three out of 10 calls made by Dito subscribers connect to Smart and Ayala-led Globe.

This led to Dito filing a complaint before the Philippine Competition Commission against its rival networks for supposedly abusing their dominant position in the telco market.

“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. 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,” Dito said.

“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,” it added.

Globe and PLDT earlier argued that Dito had to address fraudulent calls passing through its networks before talks of adding more capacity can move forward. Dito said it too is a “victim” of such fraudulent calls.

Globe earlier demanded P622 million from Dito for fraudulent calls and violating interconnection rules.

Globe said that around 1,000 calls from abroad but masked as local calls are allowed to pass through Dito’s network to Globe on a daily basis. –Rappler.com

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.