Why Globe needs to do better

06 Sep 2012

September did not start easy for the Philippines' Globe Telecom, as they received a deluge of complaints from subscribers complaining about disrupted services in the southern parts of Metro Manila.

Globe then issued a statement September 3 attributing the problems in the cities of Las Piñas, Muntinlupa, Parañaque, Manila, and Pasayto to “a connectivity issue within [its] network systems.”.

While technical glitches in telco networks are bound to happen, Globe has had a few major ones recently. A service disruption that happened in May last year was caused by a “severed undersea fiber cable” serving the Visayas and Mindanao regions.

A second one, which occurred merely three months later, was reportedly due to a surge in calls and texts. The most recent downtime, however, created a big fuss because it happened in the capital.

Three disruptions in a row in less than two years is a bit too much, and too many for comfort for a player competing with the incumbent, PLDT’s Smart Communications.

In social media, the new weapon of choice for netizens (legitimate consumers and trolls alike), there were speculations that the disruptions are caused by glitches in Globe’s $700-million network modernization program. Ernest L. Cu, Globe President and CEO, was quick to dispel this as rumor, assuring the public that their new system was going according to plan.

In a follow-up statement, which couldn’t be any clearer to the layman, Globe clarified that the connectivity issue was due to “signaling problems within its existing legacy network.”

To compensate for two days of poor to no signal, Globe offered to give rebates to customers in the affected areas. Since September 1, Globe’s Twitter account has been busy addressing complainants who are asked to send their details and exact location via a direct message (which, by the way, can only be sent to a Twitter account that “follows” you).

Rebates are, however, a tricky thing for mobile phones because users are, well, mobile. Postpaid subscribers, for example, do not use their phones only in the area stated in their billing address. How does one go about compensating those on prepaid, which makes up a huge majority of subscribers? And will Globe entertain complaints from users with no signal from weeks ago or in areas outside of Metro Manila?

This is not to say that rival Smart has been without similar problems. In fact, it welcomed 2012 with a service disruption in key cities in Mindanao. But Smart knows that it can afford to have occasional glitches with its current 70% market share. And it also knows to feed on the bad press that its rival has been getting. Its most recent TV ad campaign harps on the consequences of bad mobile service—ranging from dropped calls to delayed SMS. And with only two players competing in the market, one does not need to be smart to figure it out.

From a business standpoint, Globe’s position had been good for the past years. Even when Smart had over 50% of the market, Globe was enjoying second lead. But after Smart’s acquisition of third player Sun Cellular last October, Globe’s position turned from stable to unenviable.

From a consumer standpoint, one ought to be rallying behind Globe. It is, after all, the only other choice left. But to the layman—your minimum-wage earners and everyday commuters—it’s all economics. They are not concerned with competition, big-business politics, or brand loyalty (unlike yours truly, a loyal Globe subscriber for 11 years). It doesn’t matter who’s giving the service, really. They’ll buy the SIM that gives their money’s worth. Every single piso of it.

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