‘Bitin na Bitin’

The lyrics from Filipino artist Gary Valenciano’s song “Di Bale na Lang” resounds clear in my mind whenever I remember President Duterte’s promise to have a third telecommunications company by the first quarter of this year.

“Bitin na bitin ako” should be the pambansang refrain topmost in the citizenry’s consciousness now that the issue of faster internet and broadband speeds continues to drag on. The latest signs of difficulties being encountered in getting this election promise of the President done is the recent formation of an oversight committee to put more teeth in the government’s resolve to break the duopoly held by Smart and Globe.

But will the oversight committee – composed of representatives from the Department of Information and Communications Technology (DICT), Department of Finance, and from the offices of the executive secretary and national security adviser – really do the job?

As DICT Acting Secretary Eliseo Rio explained (perhaps justifying why the deadline for choosing the third telco has been pushed back from the nth time, the latest in September), four important issues need to be resolved before the selection process can decently move forward.

These are: the redistribution of frequencies formerly awarded to Bayan Telecommunications Inc. (Bayantel) establishment of a common tower policy for lease to new and existing players; commercialization of the National Grid Corp. of the Philippines (NGCP)-Transco’s dark fiber; and the reduction of interconnection rates among mobile networks.

In the next three months, the oversight committee will have its hands full trying to sort out these four issues.

Cornered frequencies

We all know that any aspiring competitor hoping to challenge the current stronghold of Smart and Globe on the country’s telecommunications market will need powerful radio frequencies—or spectrum—that will be able to carry their services to prospective customers or subscribers.

However, over the last two decades, Smart and Globe have been scrambling to acquire all the frequencies they could lay their hands on, either by applying for them with the National Telecommunications Commission, or through mergers with other telecommunication companies—resulting in the control now of 75 percent of the spectrum allocated for mobile telecommunications.

Duterte’s oversight committee working on the promised third telco slot is now busy looking at regaining the frequencies formerly assigned to Bayan Telecommunications Inc., a Lopez company that was slowly bought out by Globe starting in 2013.

Whether acquiring the Bayantel spectrum (plus the 10 Mhz of 3G radio frequency that PLDT had surrendered earlier this year to the NTC) will make a favorable impression on the third telco still needs to be seen.

Actually, there is a need to reform how the NTC manages the country’s spectrum bands. But this will take time, something which is no longer an option for the President and his third-telco oversight team.

Common towers

The second imperative – having common towers that the industry can use—is a bright idea, as long as it is doable. Actually, having common towers is not an issue; having more towers is.

The biggest stumbling block would be in putting up more towers, which Smart and Globe have been complaining about for so long. Much has been said about the time-consuming regulatory restrictions, as well as social issues conjured by communities where the towers are planned.

Any interested party or parties that would be allowed to put up towers would encounter the same problems that the duopoly faces—unless the government would be able to speed up the issuance of permits by forcing local governments and the courts to cooperate.

Ideally, we should have 80,000 cell sites to serve the needs of our internet subscribers, but because of the above-mentioned problems, only a quarter of these have been built so far.

Additionally, the telecoms industry needs to invest in more submarine cable systems and fiber optic cables. Without these infrastructure upgrades, cell towers will do only half the job.

Dark fiber and lower interconnection charges

The dark (or space) fiber optics line owned by the NGCP-Transco is being dangled to the third telco as an available network backbone to cover for the deficiencies of a limited spectrum left out by Smart or Globe in the duopoly’s race to gain more frequencies.

However, this may not be as attractive as it may seem (especially for a Chinese investor), if the government does indeed push through with its national broadband network plan, given that it is still currently under study by the Japan International Cooperation Agency.

On the other hand, lowering interconnection charges presents a more palatable incentive for a third telco to invest in the Philippines in view of all the limitations mentioned. The DICT wants to reduce voice interconnection charges to P0.50 per minute from P2.50, and short messaging charges to P0.05 per text from P0.15.

However, with the reduced incomes of Smart and Globe from their voice and text services because of the growing popularity of internet-based applications such as Facebook’s Messenger, Viber, Skype, and Whatsapp, the hearing scheduled on June 13 should turn out to be interesting.

Readers, brace yourself to sing “Bitin na bitin ako” for perhaps a longer time. After all, if the third telco is indeed selected in September, give the newcomer at least two years to be able to effectively compete against Smart and Globe.

As an afterthought, that may be enough time for the duopoly to move into truly 4G speeds, and therefore mollify everyone. So who needs to be concerned about having a third telco?

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