The country’s two largest telecom companies are opposing the National Telecommunication’s proposal to increase spectrum users fee for broadband frequencies, saying consumers may suffer from more expensive and poor broadband services.
Globe Telecom and PLDT Group are referring to NTC’s plan to set SUF of P500 for each outdoor radio station operated by telcos with a maximum data rate of 11 megabits per second and P1,000 in excess of 11 Mbps. The rates are applicable to radio frequency bands 2400MHz to 2483.5MHz, 5150MHz to 5350MHz and 5470MHz to 5850MHz.
“Higher spectrum prices threaten affordable, high-quality mobile broadband services. When spectrum prices are set too high, operators are likely to invest in the networks which impacts the quality and reach of services,” Globe said in a position paper submitted to NTC.
“Operators are also less able to engage in price competition leading to more expensive mobile broadband services for consumers. When spectrum fees are set too high, consumers may suffer from more expensive, lower quality mobile services,” it said.
Globe said the “exorbitant” cost of spectrum is “not suitable and poses a major threat for the future growth and development of mobile services.”
“We submit that the NTC is duly empowered to prescribe a zero rate for open and unprotected frequencies pursuant to its power to fix SUF from zero to a specific amount, consistent with Republic Act No. 3846, otherwise known as the Radio Control Act and international best practices,” Globe said.
PLDT called for the reduction and/or rationalization of SUF for all spectrum/frequencies.
“Currently, fees imposed on PTEs [public telecommunication entities] are becoming unreasonable and excessive. It is our position that SUF must be set at modest levels with a view to recovering the regulator’s spectrum management costs,” PLDT said.
It said the pricing structure where SUF on a particular band is computed on a per KHz/station basis discourages network rollout as deploying more base stations increases the SUF.
“Usage fees must not hinder the development of innovative services or act as a barrier to competition. High spectrum costs will make it difficult for PTEs to make the necessary investments to support expansion projects―which ultimately impacts quality of service,” PLDT said.
“A more reasonable method of computing SUF will certainly encourage PTEs to invest and deploy more advanced technologies like 5G, which promises faster speeds, lower latency and greater load capacity,” it said.
PLDT said spectrum fees set too high combined with income taxes, value added tax, excise, regulatory fees and other charges could negatively impact growth opportunities and attractiveness of the sector.
“There is a pressing need to review existing policies and regulations relative to SUF,” it said.