CONSTRAINTS on permits and capital requirements may be a thing of the past for telecommunications providers in the Philippines, as the government has revamped its policy on telco tower construction, with foreign firms signifying their interest to invest $5 billion to supply the dearth in infrastructure in the local telco sector.
Department of Information and Communications Technology (DICT) Officer in Charge Eliseo M. Rio said his group has received feelers from foreign companies for the construction of common towers in the Philippines.
This, he explained, will help reduce capital expenditures of existing telcos, address the issue on permitting and increase the coverage of telco service in the country.
“The government has decided to implement a common-tower policy, which means that the operators will no longer be allowed to build towers, but instead lease space from a tower company,” he said in a news briefing on Friday.
Presidential Adviser on Economic Affairs and ICT Ramon P. Jacinto, who is tasked to implement the said program, explained that this policy will result in lower costs on the telcos, and will give players more time to focus on their core businesses, as this removes the burden of building infrastructure in areas that they find permitting a bit too hard.
“Tower companies will concentrate on rapidly deploying towers to cover the entire Philippines adequately, freeing up the telecom players,” he said.
American Towers, a foreign tower company, has signified its interest in doing business in the Philippines.
Telco towers—infrastructure where radio transmitters are housed—in the Philippines remain inadequate.
Based on a study made by TowerXchange, an independent community for operators, tower companies, investors and suppliers interested in emerging-market telecom towers, the Philippines lags behind its neighbors in Asia when it comes to cell-site build.
The number of unique physical cell sites in the Philippines is one of the lowest in Asia, with a combined 16,300 cell sites. China has the highest number with 1.18 million cell sites, followed by India with 450,000 and Indonesia with 76,477 cell sites, while Vietnam has 55,000, Thailand with 52,483, Pakistan with 28,000, Bangladesh with 27,000 and Malaysia with 22,000 sites.
“We need 47,000 more to be comparable to Vietnam,” Rio lamented.
A total of 50,000 towers are set to be built by tower operators, pending public consultation and auctions, Rio added, saying that the deal will not be limited to just one player.
“Those 50,000 towers can give business to two to three common-tower operators,” he said.
Jacinto noted that the manner and method of the rollout will be based on successful ones from other countries, such as the United States, Indonesia and India.
“Common towers are quicker to deploy, they remove redundancy, remove the biggest problem for telco operators, save them money, and provide level playing field,” he added. “All these benefits will be there.”
The specific guidelines for the common-tower policy should be out by next month.
“My best guess is by the last quarter of this year, we will have agreements on those who want to set up businesses here. Actual implementation might be for the same quarter or the first quarter of 2019,” Jacinto said.
Globe Telecom Inc. executives have been very vocal about their issue on tower construction, citing constraints on securing permits, the lack of standard fees that result in corruption and right-of-way issues.
Gil B. Genio, who sits as chief technology officer at Globe, has said that his group “supports the concept” of tower companies, as this could help improve the company’s coverage in the Philippines.
Manuel V. Pangilinan, the chief executive of PLDT Inc., simply shrugged when asked whether the company is open to tower sharing with future players or not.