The future of 700 MHz band remains unclear

Chrisee Dela Paz

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The future of 700 MHz band remains unclear
The future of the prized 700 megahertz frequency remains unclear, with 3 of the country's largest corporations exhausting all means to get hold of the band

MANILA, Philippines – It has been about 7 years since the country’s two largest telecommunications firms – Philippine Long Distance Telephone Company (PLDT) and Globe Telecom, Incorporated – first asked the National Telecommunications Commission (NTC) to “fairly reallocate” the 700 megahertz (MHz) spectrum band mostly held by San Miguel Corporation (SMC).

But until now, the Philippine telco regulator has not responded to Globe’s and PLDT’s requests, leaving the two companies in limbo.

NTC: It’s a quasi-judicial process

Asked why it has not decided on the telcos’ pleas yet, NTC Deputy Commissioner Edgardo Cabarios was quoted in news reports in November 2015 as saying: “700 MHz radio frequency band is a quasi-judicial matter. Before you can reassign or recall a frequency, you have to file a case before the regulator – citing either non-use or non-payment of spectrum fees.

Cabarios reportedly said that it would be difficult to reallocate the 700 MHz as it has already been assigned. (READ: 700 MHz band to aid smartphone penetration uptake – Ericsson)

San Miguel holds most of the 700 MHz in addition to its 800,1800, 2300,and 2500 frequency bands.

PLDT, meanwhile, has rights to 800 MHz, 900 MHz, 1,800 MHz, and 2,100 MHz bands. Globe holds 900 MHz, 1,800 MHz, and 2,100 MHz bands.

The amount of spectrum assigned to a telco impacts the cost of the build capacity, overall network performance, ability to offer new multimedia services, and general customer experience of wireless services.

Next steps prepared

For PLDT, measures should be undertaken for NTC to respond to their long overdue requests. 

“That’s an inordinate amount of time to act upon the formal requests of both Globe and Smart, so we should have a basis to bring an action in order for them (NTC) to take action on our application,” PLDT regulatory affairs and policy head Ray Espinosa said on the sidelines of a briefing last week.

PLDT said it would bring the matter to the attention of the Office of the President, which has supervision over NTC, in case the regulator fails to act on the telcos’ application for a 700 MHz allocation and several follow-up letters.

“In one way or another, they have to decide whether they want to give us a share or they don’t want to give us a share, because if they don’t want to give us a share for whatever reason they may have, then we should have a clear action to take,” Espinosa said.

“Right now, we are in limbo,” he added.

Asked what PLDT would do if NTC would not respond by the end of 2016, Espinosa replied: “We would be constrained to file an action. We’ve given them much time.” 

He said that not acting upon a formal request is “already a gross violation on laws applicable to public officials.”

“It’s not some verbal request. It’s a formal one and it is needed by the public service,” Espinosa added.

In the case of PLDT wireless subsidiary Smart Communications, Espinosa said its first application dates back to 2008 – a good 7 years before Telstra announced that it was in talks with San Miguel for a possible venture in the Philippines. (READ: Telstra-San Miguel a bumpy, costly ride)

On August 28, 2015, Telstra confirmed to the Australian Securities Exchange that it is “in discussions” with SMC for a possible wireless partnership. It also disclosed they have reached a point wherein “financing is being sought in relation to that joint venture.” 

How can San Miguel have a total of 302 MHz when it has not launched a service yet? We have close to 70 million subscribers, and Globe has close to 55 million subscribers. Obviously, we are in need of more frequencies than somebody who has 302 MHz already and has no service yet,” Espinosa said.

“Even if they launch a service, they just have too much frequencies,” he added.

PLDT: Not blocking new entrants

According to PLDT Spokesperson Ramon Isberto, Smart and its subsidiary Smart Broadband have since written the NTC a total of 8 letters to follow up on their applications.

Isberto said in a separate letter that PLDT’s position on the matter has been consistent since 2008:

  • The 700-MHz radio frequency band be reassigned from broadcast TV to mobile telephone
  • The said frequency be equitably distributed in a transparent manner among existing operators and new entrants.

This position is entirely consistent with the fact that the telecommunications industry has been liberalized and open to competition since the mid-1990s. More importantly, it will help improve Internet services in the country and benefit businesses and consumers, especially those in rural areas,” Isberto said in a letter forwarded to Rappler.

“What is anti-competitive is the present situation where San Miguel controls the entire 700 MHz band, as well as substantial unutilized chunks of radio spectrum in other frequency bands through various corporations,” Isberto added.

Globe: This is for public service

Globe general legal counsel Froilan Castelo had said that giving active and operating telecommunications companies access to the 700 MHz spectrum will immediately benefit the public, especially in terms of consumer pricing.

“We hold the position that the 700 MHz frequency should be reallocated for the benefit of the country and the industry. We have been calling on the NTC to do this since 2005 and we will continue to exert all effort to get that reallocated,” Castelo said in an earlier statement.

He said that “in an era of very scarce spectrum resource globally, we should be utilizing all our resources in delivering high speed data to our customers.”

“We continue to call on the government and our regulators, in particular, to ensure the equitable distribution of that spectrum throughout the industry,” Castelo said.

SMC: They have more than enough

The holder of the 700 MHz is not in favor of giving PLDT and Globe access to its frequency. SMC said it is needed to promote market competition.

“They have more than enough frequency between them. They have almost 300 MHz of LTE frequency. Why do they need more? All they need is to improve and fine-tune what they have,” SMC president and COO Ramon Ang had told reporters.

Why 700 MHz is in demand

There is a reason why 3 of the country’s biggest corporations are vying for the frequency band. (READ: New Internet speed minimum throwback to ’90s?)

Existing operators and new entrants are drawn to the Philippines because of the undoubted growth potential in the relatively unsophisticated market. How does one unlock this potential? This is where the 700 MHz frequency band comes in.

According to the GSM Association (GSMA), the Philippines and Thailand are the only countries in the Asia-Pacific that have yet to utilize the 700 MHz frequency, a key resource in providing faster Internet services.

GSMA reported that except for the Philippines and Thailand, all other countries in the region – including Afghanistan and Bangladesh – have either adopted the APT Band Plan or the most efficient arrangement of the 700 MHz band for mobile communications services.

For PLDT and Globe, the 700 MHz band is key for expanding mobile broadband into the outlying islands and rural provinces in the Philippines. This would enable mobile operators to reduce capital and network costs, thereby accelerating rollout and lowering prices for end users.

For SMC, without the spectrum, there is no mobile business possible. – 

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