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NTC sets auction for 3rd telco frequencies in 2017

MANILA, Philippines – The National Telecommunications Commission (NTC) will auction off the surrendered spectrum frequencies from San Miguel Corporation in the middle of 2017, in a bid to lure a 3rd major player into the country's telecommunications sector.

On the sidelines of a summit in Makati City last Tuesday, November 8, NTC Commissioner Gamaliel Cordoba told reporters that his office expects "to finish it [terms of reference] by middle of next year."

The NTC said it is in talks with the Department of Information and Communications Technology (DICT) regarding the planned auction of the bundled 700 megahertz (MHz), 2500-2700 MHz, 800 MHz, and 3400-3500 MHz, which were returned by PLDT Incorporated and Globe Telecom Incorporated when they bought San Miguel's telco assets last May.

Cordoba said this could also include the 10 MHz 3G frequencies of Connectivity Unlimited Resources Enterprise (CURE) from PLDT.

"Several groups have already sent letters to us expressing their interest," the NTC commissioner said, adding that two of them are Dennis Uy's Converge ICT Solutions Incorporated and Mel Velarde's Now Telecom.

San Miguel was supposed to launch a 3rd major telco player this year, but its talks with Australia's biggest phone and Internet provider, Telstra Corporation, collapsed after both failed to agree on an equity investment.

A couple of months after its talks with Telstra failed, San Miguel sold all of its telco assets to the two telco giants, PLDT and Globe, for P69.1 billion.

'Not enough for 3rd player'

But for ICT advocacy group Democracy.Net.PH, the bundled spectrum frequency that NTC will auction off next year is "not enough" for a 3rd major player "to operate and thrive."

The group added that PLDT and Globe own nearly 80% of the total available and allocatable spectrum, inclusive of guard bands, according to the National Radio Frequency Allocation Table (NRFAT).

"The remaining 20% of spectrum which the NTC has recently trumpeted that it will auction off, are not all allocatable spectrum, some of it will not be usable because it has guard bands," Democracy.Net.PH said in its position paper.

With the existing spectrum available for allocation, "there is not enough spectrum to be attractive for the entry of even just one potential new player; as in basketball, any potential third player has been boxed out by the duopoly," said the group.

For Globe chief information and technology officer Gil Genio, being a player in the country's telco industry requires "$800 million to $1 billion a year in capital spending."

"You can't force a 3rd, 4th, or a 5th player to come in because of the sustained capital spending. In fact, in the past, there used to be a 5th player, but the 3 others chose to close because of financial distress. So now, there are just two," Genio told reporters during a media briefing in Taguig City on Monday, November 7.

Last July, 5 small local players entered the Philippine telco industry after their franchises were approved by Congress and lapsed into law. (READ: Avocado, 4 new players enter PH telco industry)

But a check with Cordoba showed that these new telco players haven't written a letter yet to NTC for allocation of spectrum frequency.

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. – Rappler.com