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Telstra’s entry worries rivals

Another war is brewing in the telecom industry, ahead of Telstra Corp.’s planned entry, as the incumbent players asked the government to auction off some of the “very powerful” mobile frequency band held by San Miguel Corp.

Ray Espinosa, head for regulatory affairs of Philippine Long Distance Telephone Co., said the 700-megahertz spectrum was “very important” to provide faster Internet broadband services.

“Today, there is about 100 megahertz of that spectrum which is actually all of it, that is in the hands of a few possibly related companies,” Espinosa said. 

The 700 MHz band, located above the TV broadcast channels, penetrates buildings and walls and covers larger areas.  Mobile wireless service providers in other countries have been using the  spectrum to offer mobile broadband services.

Telstra chief executive Andy Penn earlier said San Miguel would be a “very strong” partner in the Philippines because of its spectrum holdings.

Espinosa said the government allocated 80 megahertz of spectrum in the 700 MHz band to wi-Tribe Telecommunications Inc., 10 MHz to Hi-Frequency Telecommunications Inc. and 10 Mhz to New Century Telecommunications. 

San Miguel owns  wi-Tribe and Hi-Frequecy, which plans to form a mobile phone joint venture with Telstra.

Espinosa said the 700-MHz band is a “very powerful” frequency because the coverage is wider and the capital spending requirement is lesser. The spectrum was previously used for analog television broadcasting.  

“Countries all over the world are moving out of analog TV and therefore freeing this [700 MHz] very efficient, very optimal spectrum for mobile telecommunications,” Espinosa said. 

“So if we want the mobile, the Internet to be faster, to provide better quality service to consumers, PLDT Smart and Globe and the others should have access to this 700 MHz which is a very scare resource,” he said.

“All over the world, this particular spectrum is being made available to existing operators as well as new entrants and there is no reason why PLDT and Smart cannot be given access especially if they are highly unutilized,” Espinosa said.

Espinosa said the company already requested the National Telecommunications Commission for its fair share in the 700-megahertz band. 

“If they open 700 MHz to public bidding, we will obviously participate and that would actually be a monetary dividend to the government. We want to participate in that digital dividend and by doing so, we will be able to address many of the speed requirements of mobile telecommunications,” he said. 

Yolly Crisanto, spokesperson of Globe Telecom Inc., said what her company wanted was the  harmonization of the 700-MHz frequency. 

“According to the GSMA  the Philippines is one of only two countries in the world that have not used the 700 MHz despite new technologies introduced to make mobile data services more cost efficient,” she said. 

PLDT chairman Manuel Pangilinan said his company was ready to compete with Telstra once Australia’s biggest telco entered the Philippine market. 

“Our planning assumption for 2016 includes the prospect of Telstra’s entry into the market by 2016,” Pangilinan said. 

When asked about the impact of Telstra, Pangilinan said: “Well, its rather difficult to say,  because we actually don’t know how, when and what form they will enter the market so we have to deal the situation as well. We just have to be ready,” he said.

Pangilinan said PLDT spent about P203 billion from 2010 to 2015 to improve its network. 

PLDT and Globe statements came on the heels of the possible entry of Telstra in partnership of San Miguel Corp.  

Representatives of San Miguel and NTC were unavailable for comment as of press time. 

San Miguel has  four telecommunications companies under its portfolio, including Express Telecommunications Inc., Eastern Telecommunications Philippines Inc., Bell Telecommunications Philippines Inc. and Liberty Telecoms Holdings Inc.

Penn also described the telco experience in the Philippines as “lousy.” 

The planned joint venture between San Miguel and Telstra would see the local conglomerate holding a majority stake, in compliance with the 1987 Constitution,  which limits the foreign ownership of utilities to a maximum of 40 percent.

Telstra plans to invest less than $1 billion in the Philippines to roll out the telecom network. 

Telstra currently operates customer service centers in the Philippines that serves its clients globally. San Miguel earlier said it planned to launch mobile broadband services as early as January next year.

Topics: Telstra Corp. , PLDT , San Miguel Corp.
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