REFARMING and reallocating radio frequencies for mobile technology is a “serious matter” that requires “careful attention,” PLDT Inc. Chairman Manuel V. Pangilinan said, adding that the telecommunications company (telco) is “actively and thoroughly” utilizing its current portfolio of spectra.
Pangilinan said he wants to assure the government that PLDT is making good use of the frequencies it secured from the acquisition of the telco assets of San Miguel Corp. two years ago. “That’s a serious matter of public interest, [and the government must] give careful attention to it,” Pangilinan said. “As far as we are concerned we are using actively and extensively the frequencies we have acquired from San Miguel.” PLDT and rival Globe Telecom Inc. joined forces to acquire Vega Telecom Inc. from the Ramon S. Ang-led conglomerate San Miguel in 2016.
Such a transaction—prized at about P70 billion—resulted in the two telcos increasing their portfolios of frequencies.
Data from the National Telecommunications Commission showed that existing telcos hold majority of the said assets to date. PLDT holds 400 megahertz (MHz) of the total holdings, while Globe has rights to 325 MHz.
What remains for budding telecom players is a mere 140 MHz of frequencies in the 700 MHz, 850 MHz, 2100 MHz, 2500 MHz and 3500 MHz spectra.
Spectrum is the real estate on which telecommunication operators develop their respective network to deliver services to customers. The amount of spectrum assigned to a telco has an impact on the cost, the build capacity, overall network performance, ability to offer new multimedia services and general customer experience of wireless services.
Talks on the possible refarming and redistribution of the frequencies have been going on since 2016. The issue then found itself in the limelight after President Duterte announced the potential entry of China Telecom as a new telco player.
Experts argue that the remaining swathe of frequencies is not enough for a new player to compete with the existing vendors.
Duterte has said that the Chinese telco should come in by the first quarter of 2018. As to the method and means of its entry still remain a mystery for the existing players and experts.
Foreign companies are, by law, allowed to own up to 40 percent of company in the Philippines. Budding telco players are also required to secure a congressional franchise before they start operating in the country.
Pangilinan noted that his group “respects” the President’s call for a new player in the duopolistic telco market.
“We’ve always said we’d welcome a third player,” he said. “All we can do at this stage is to prepare for that, but our main job is to build a superior network for fixed and wireless to be sure that the service is world class.”
This, he said, is his group’s commitment to Duterte, citing his company’s planned capital expenditures (capex) of more than P50 billion for 2018.
“We said that we will show that with the level of capex north of P50 billion to demonstrate that we are getting serious about our wireless and fixed networks,” Pangilinan said. Bulk of the capital outlays will be used to intensify its network’s capacity and coverage. This includes the setting up of new base stations and the expansion of its fiber-optic cable systems.
Although experts describe the telco market as duopolistic, Pangilinan said the sector is actually highly competitive.
“Competition is intense, I don’t think its abated,” he said. He admitted, though, that the price wars have toned down.
“There’s less competition in the price aspect,” PangIlinan said. Experts and government officials have long pushed for the entry of new players in the telco market, as this would force the existing vendors to provide better and more affordable mobile services to their customers.