THE draft policy for the deployment of common telco towers in the Philippines is illegal and anticompetitive as it limits the number of providers to two while infringing on the rights of congressional telco franchise holders.
This was the heart of the statement of Acting Information and Communications Secretary Eliseo M. Rio Jr., who explained that the draft, ridden with potential court cases, has been flagged by several government agencies and industry stakeholders.
Rio, who heads the Department of Information and Communications Technology (DICT), said the draft essentially removes the right of telcos with congressional franchises to build their own infrastructure, as it will grant the exclusive capacity to do so to the tower companies the government will employ.
Presidential Adviser on Economic Affairs and ICT Ramon P. Jacinto, known for his stage name RJ during his singing career, leads the drafting of the common towers policy.
“A telco’s franchise has the weight of a law and only another law—not a department policy, a memorandum circular, nor an executive order—can amend a law. This crucial matter has never been addressed by RJ in defending his draft policy,” Rio said.
Rio added the Philippine Competition Commission (PCC), the Office of the Solicitor General (OSG) and industry stakeholders have flagged the draft policy for its anticompetitive nature, given that under the proposed rules, only two tower companies will be accredited by the government to build 50,000 towers across the Philippines during the nascent stage of its implementation.
“He also argues that this would make the selected two tower companies’ business viable and that it will aid in securing cybersecurity issues. But why must government nurture the viability of selected tower companies when there are already a number of internationally viable tower companies operating worldwide, that have shown interest in becoming a tower provider in the Philippines and are not worried as to the number of competition they will face?” Rio said.
The ICT chief also questioned the statement of Jacinto that referenced telco towers as a source of cybersecurity threats.
“It is the telcos themselves that have to be monitored for such threats and the DICT is already seriously addressing this problem,” he said.
Sought for comment, Jacinto explained that telco’s franchises are still “subject to regulatory control,” hence, the giving of rights to tower companies to build infrastructure, instead of allowing telcos to build their own towers.
“The guidelines do not violate their franchise,” he said. “The franchise does not in itself give you unregulated operations.”
He noted that telcos can still build if the tower companies cannot construct cell site in areas where they want to erect.
“There is a 30-day period, when after receiving a written request from the telco, the tower company must say yes or no within 30 days,” Jacinto explained. “So we are not taking away their right to build completely when the tower company cannot build. The government has every right to regulate tower sharing for the public good because the consumer is suffering.”
He also scored Rio for issuing a statement against him, saying that Rio should “refrain from commenting further on common-tower sharing as a courtesy to incoming Secretary Greg Honasan.”
“Clearly, the President gave me written authority to take charge of the guidelines and I have told Rio I will take this up with incoming Secretary Honasan upon his assumption of office,” Jacinto said.
Rio noted that his office is not delaying the development of common towers in the Philippines by questioning the draft. Instead, it is championing the said initiative.
“We will come out with a memorandum of understanding with any capable tower company that if they can get a contract or agreement with a telco to lease their towers, the DICT will fully support the tower company in terms of facilitating permits, right of way and other government support for infrastructures,” he explained.
This means that the tower provider must first demonstrate its viability by getting a business transaction with a telco before the government can support it.
“In effect, only common towers will get government’s full support, and towers to be built by telcos will only get support if they can show that a tower company will not construct a tower near the location they want their tower to be,” he explained.
As early as last December, the ICT department signed a memorandum of understanding with Isoc Infrastructure Inc. for the development of common towers across the Philippine archipelago.
So far, there are three more tower companies that have shown interest in the initiative, and Rio’s office is looking at replicating its agreement with Isoc to push for the development of more telco infra in the fast-growing digital Philippines.
“Further, the government will propose to subsidize common towers that will be built in underserved or unserved areas,” he said.
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. Vietnam has 55,000, Thailand 52,483, Pakistan 28,000, Bangladesh 27,000 and Malaysia 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 meagre 0.14 to Asia’s current giant China’s 1.43.
“The DICT recognizes that the country is in dire need of more towers the soonest to improve our ICT industry. Any delay would not be acceptable,” Rio said.