“Players Make the Rules as Referee Plays It Cool” : A research on the role of regulatory instruments on competition in the Philippine telecommunications industry from 1996 to 2016

Telecommunication, in the form of short messaging service (SMS), call or online chat and video messaging, is a crucial part of most Filipinos’ lives. While the industry has been in the forefront of technological advancements and service innovations, there is still clamour for better and more affordable services as the quality and rates of telecommunication services trail behind developing countries in Asia Pacific and worldwide. Lack of competition, as evident in the absence of worthy challengers to the current “telco duopoly” in the country, leaves consumers with no choice and puts no pressure to incumbents to improve. The passage of Public Telecommunications Act of the Philippines in 1996 opened the industry and welcomed numerous players thereafter. However, two decades after, the industry turned into an unshakeable, impenetrable duopoly composed of PLDT and Globe Telecom. This research examines the role of regulatory instrumentalities in the government’s failure to veer the industry toward a more competitive environment in the long term. By combining theories derived from competition and regulation literature with best practices in the European Union, the United States and ASEAN, the author juxtaposed theories with realities to identify hits and misses in the regulatory environment. After doing so, the study found out that timing was a key issue. While the government set the principal rules of the game, it fell short in firing up the institutions to keep up with the rapid technological developments and the aggressive race between the industry players. Regulators remained cool in overseeing a roused industry.