INDEPENDENT tower companies (towercos) that will be accredited by the Department of Information and Communications Technology (DICT) in 2019 will have seven years to finish constructing 50,000 telco towers with a combined cost of $4 billion.
Presidential Adviser on Economic Affairs and ICT Ramon P. Jacinto said the government aims to accredit two entities by the first quarter of 2019, so that construction of the initial batch of towers can follow a quarter after.
“There is a buildup period of six months. There will be a consultative period and discussion period with the telco operators to get their inputs on what locations will be ideal,” said Jacinto.
The consultation should be accomplished within the year.
Based on the preliminary guidelines released by the government on Thursday, two independent entities would have to build 25,000 towers each until the first half of 2027.
For the first year, each company shall build 1,000 towers on the first year; 2,000 for the second; 3,000 on the third; 4,000 on the fourth; and 5,000 for the fifth to seventh years.
All of this are expected to cost each towerco an estimated $2 billion, or $4 billion in total. It’s a bit lower than the original government estimate of $5 billion for the whole program.
Jacinto noted the government will only accredit two towercos in the first seven years of implementation, but plans to accredit others after the whole program are also in place.
“If you accredit too many at the start, it will not be competitive and they may not survive. For a certain number of years, there will be two towercos, But maybe after the seven years, we can accredit more,” Jacinto said.
As of now, five foreign companies have expressed their intentions to participate in the government’s initiative.
Plans for the common towers include expanding to areas beyond the current 8,000 locations currently with existing towers.
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. Vietnam has 55,000, Thailand with 52,483, Pakistan with 28,000, Bangladesh with 27,000 and Malaysia with 22,000 sites.
With 113 million mobile subscribers and only a combined total of 16,300 towers from PLDT Inc. and Globe Telecom Inc. servicing them, the Philippines has the lowest tower density score in Asia, with a meager 0.14 to Asia’s current giant China’s 1.43.
“In the early stages, the towercos will be mandated to build in areas that need service even if there is no request,” Jacinto said.
Other benefits include capital expenditures savings amounting to $1 billion for PLDT and $850 million for Globe, which can now be rededicated to upgrading radio services for their clientele.
“It’s the biggest headache of the dominant players; and you’re getting rid of that headache. So it’s a win-win situation,” Jacinto said.
With the initial guidelines, mobile network operators (MNOs) will no longer be licensed radios by the National Communications unless said radios will be located in the shared telecom tower.
An exception to this rule said should a telco not receive a response from the TowerCo on their prospective tower-site location within 30 days, the telco in question will be allowed to build on the location requested, with the permission of the NTC.
“If they want to build a tower and – let’s say, in a certain location. Let’s say Globe or Smart. And the common tower company does not respond in 30 days and they are willing to do it, they can build their own. So it’s not that absolutely they cannot. It’s only when the common tower company cannot fulfill their needs,” Jacinto said.
This new provision came about “because that was what was requested of us by PLDT…. Because we don’t want to stifle them, too. It’s bad for the public,” Jacinto said.