TransCo plans to diversify into telecoms, compete with the giants

MANILA, Philippines – National Transmission Corporation (TransCo), the state-run firm that holds the country’s transmission assets, plans to diversify into telecommunications and compete with giants PLDT Incorporated and Globe Telecom Incorporated.

If its proposal pushes through, the company will be renamed to National Transmission and Telecommunications Company.

“We want to be a provider of telecom facilities. We will compete with the telcos,” said TransCo President Melvin Matibag.

TransCo was created under Republic Act (RA) No. 9136, also known as the Electric Power Industry Reform Act (EPIRA) of 2001. 

It was in March 1, 2003 when TransCo started owning and operating the power transmission system that links power plants to electric distribution utilities nationwide. 

For Matibag, “it makes sense” to diversify into telecommunications as it is “the owner of the facilities,” referring to the fiber optic cables that could be used to provide internet services nationwide.

Internet services

“I want TransCo to diversify, just like telcos and other private companies are doing,” the TransCo chief added. (READ: How PH’s top antitrust official is guarding market competition)

EPIRA mandated the privatization of TransCo through an outright sale or management concession agreement. 

Through a public auction in December 2007, the National Grid Corporation of the Philippines (NGCP) bagged the TransCo contract.

The NGCP secured a congressional franchise to operate the transmission network through RA No. 9511. 

In January 2009, the NGCP took over the management and operation of TransCo’s nationwide transmission system.

But ownership of all transmission assets remains with TransCo. 

Amend charter

To start implementing his firm’s plan, Matibag said he will need to ask Congress to amend TransCo’s charter so it could offer telecommunications services and products.

“Recalibrate the law which is the EPIRA that created TransCo. Congress has the power to do that,” he said. (READ: Chinese telcos, US tech firm eye entering PH telco market)

“I want TransCo to not only be a transmission company but also a telco company. This is a long process but we have to start now,” Matibag added.

For the TransCo chief, funding will be the least of their concerns as the state-run firm would have the “franchise and power to do that.”

“After all, we are the owner of the facilities. Globe and Smart are using our towers for telecommunications,” Matibag added.

He said TransCo is set to formally submit the proposal to Congress before the end of 2017. He is also confident that majority of lawmakers would back his proposal.

TransCo’s responsibilities include ensuring the NGCP’s compliance with the terms and conditions of the contract and the policies of the Department of Energy (DOE); as well as divesting remaining sub-transmission assets to technically and financially qualified electric distributors nationwide.

Other than TransCo, another firm eyeing to strengthen its presence in the telecommunications industry is listed Philippine Telegraph & Telephone Corporation (PT&T), which was recently acquired by a new investor, led by business magnates Salvador “Buddy” Zamora II and Benjamin “Benjie” Bitanga.

PT&T maintains over 500 kilometers of redundant fiber optic routes throughout Metro Manila and surrounding areas. Last year, it secured a franchise extension of another 25 years.

Now Corporation of Mel Velarde has also been asking the National Telecommunications Commission (NTC) to reallocate mobile frequency to the company to be able to compete with the two telco giants. – Rappler.com