Shift in Philippine telco space

Last week was quite eventful for the Philippine telecom sector when two of the country's biggest telephone operators revealed interesting figures and top-level personnel movements.

Globe Telecom, owned by the Ayala family and Singapore's SingTel group, was the first to make the news when it revealed it was replacing its long-time president and CEO, Gerardo "Gerry" Ablaza, as part of a major management shakeup undertaken by its mother firm.

Ablaza was named chairman of the much-larger Ayala, a move technically classified as a promotion but seen by some quarters as something like being "kicked upstairs".

Interestingly, the guy tapped to replace him is Ernest Cu, who used to be with Globe's rival company PLDT. Cu made a name in the industry when he headed SPI Technologies, a BPO (business process outsourcing) service provider engaged in content services, which he later sold to ePLDT, the Internet arm of PLDT.

Members of the media had a hunch that something was brewing when Cu was introduced as "deputy CEO" during a Globe event a week before. The hint was obvious because that title has never been used before--at least, as far as I can remember.

Apparently, the changing of the guards at Globe was undertaken as a way to jolt the carrier back to life after years of underperformance. Prior to being overtaken in terms of subscriber base by Smart, PLDT's wireless subsidiary, Globe was the country's pre-eminent GSM operator.

PLDT, meanwhile, continues to romp away as it reported its 2008 financial results. The report contained many numbers, but the overall picture that I got was that PLDT now seems to be on its third reincarnation.

PLDT, a telco monopoly during the reign of the late strongman Ferdinand Marcos, first started out as a landline provider. For decades, its main source of revenue came from this specific business model. A new management, led by Manny V. Pangilinan, then arrived and acquired a mobile operator named Smart, which became the company's cash cow. Now, it appears to have fully embraced its role an Internet company with its focus on providing broadband access to homes and businesses.

As I've written in my previous post, PLDT's rise as an Internet company also pushed entities such as ISPs (Internet service providers) out of business. But, that's part of the game.

Given its dominant position, my only desire now is for PLDT not to revert to its old monopolistic ways when customer service took a backseat to corporate profit.

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Melvin G. Calimag

Melvin G. Calimag currently writes for the infotech section of a popular English broadsheet in the Philippines. Prior to this, Melvin served as an assistant editor at Metropolitan Computer Times (MCT), the first IT publication in the Philippines. He is currently the vice president for internals at the IT Journalists Association of the Philippines (CyberPress), and also serves as a charter member with the Philippine Science Journalists Association.