THE “politicization” of the country’s telecommunications sector that led to the forced shutdown of the services of ABS-CBN Corp. and its affiliate Sky Cable Corp. will further dampen investor sentiment, Fitch Solutions Country Risk & Industry Research said.

“The forceful termination of ABS-CBN and Sky’s broadcasts are highly politicized, and clearly linked to President Rodrigo R. Duterte’s opposition toward ABS-CBN,” Fitch Solutions said in a commentary e-mailed to reporters on Wednesday.

It said the politicization of the media giant and its unit adds to the factors that discourage investment in the country’s telecoms sector.

Fitch Solutions described the Philippines’ existing telecommunications regulations as “fluid and inefficient.”

“Given the politicization of media services and the challenging outlook of the Philippines’ telecoms sector, we have revised downward the country’s telecoms Industry risk score, which now stands at 46.1 points out of a possible 100, down from 57.5 in our previous quarter’s update,” the London-based think tank said.

The National Telecommunications Commission (NTC) issued on June 30 a cease-and-desist order against the direct broadcast satellite service of Sky Cable whose legislative franchise had expired on May 4. It demanded Sky Cable to refund unconsumed prepaid loads, deposits on subscriber equipment, and charges from new applicants, as well as advance payments.

On the same day, the regulator issued a separate cease-and-desist order against ABS-CBN, directing it to immediately stop digital television transmission through its TV Plus programs in Metro Manila using Channel 43, which is under a separate entity with a valid franchise. Consequently, ABS-CBN decided to stop airing its programs via TV Plus in all areas nationwide.

The NTC issued the orders after lawmakers questioned the continuing operations of ABS-CBN whose legislative franchise had also expired on May 4.

“The regulator’s apparent ability to be influenced by the government continues to be a key impediment to foreign investor sentiment, and has also made the telecoms landscape difficult for both new entrants and existing players,” Fitch Solutions said.

It also cited as an example the long-delayed issuance of the tower sharing policy, which highlighted “the slow pace of instituting reforms, and has partially contributed to the delay of new telecoms entrant, Dito Telecommunity, in rolling out its commercial services.”

Mr. Duterte had been vocal about his criticisms against ABS-CBN for not airing his ad during the presidential campaign in 2016. In a speech in December, he said: “I’ll see to it that you’re out.”

Early this year, he had a change of heart when he accepted ABS-CBN’s apology and told the company to donate to charity the refund money for the unaired ad.

On Tuesday, Presidential Spokesman Harry L. Roque, Jr., said Mr. Duterte is “neutral” about the recent issues raised against ABS-CBN during the hearings on its franchise renewal at the House of Representatives.

Various issues against ABS-CBN were scrutinized by House lawmakers in recent hearings: from its tax payment to the shows aired by the Lopez-led network. The lawmakers are set to finish their hearings on the company this week.

ABS-CBN’S O SHOPPING TO SHUT DOWN
Also on Wednesday, the ABS-CBN announced that ACJ O Shopping Corp., which is a joint venture with South Korean media company CJ ENM Co. Ltd., will stop operations towards the end of the year.

“The past two years have been challenging for the company as it experienced financial losses. The COVID-19 (coronavirus disease 2019) outbreak has and will continue to take a toll on the business this year. ABS-CBN’s partner, CJ ENM, has also decided to move its business out of Southeast Asia completely,” it said in a statement.

“As a result, ACJ O has made the difficult decision to let go of its employees starting 7 August 2020,” it added.

ABS-CBN said further that it will make further announcements regarding the selling of its goods on-air and online. “ACJ will continue to serve its customers as best it can despite the reduction in manpower in the next few months.”