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ENDING A TELCO TRADITION

Gov’t pushes new cell tower scheme for level field, better service

/ 07:10 AM January 20, 2018

The Duterte administration announced on Friday a major policy shift in the telecommunications sector to speed up the rollout of crucial infrastructure and provide a “level playing field” for an expected challenger to PLDT and Globe Telecom.

In a press conference, Ramon “RJ” Jacinto, a musician and entrepreneur who advises President Duterte on economic affairs and telco concerns, spoke of the country’s upcoming adoption of a common tower policy.

The rules, expected to be released next month, would upend decades of telco investment tradition in the country, which was mainly left in the hands of the service operators.

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Under a common tower policy, the government will tap a third party group which will finance and build “independent” cell towers, which will then be leased to operators such as PLDT, Globe and new entrants.

“This paves the way for a level playing field for a third player,” Jacinto said, noting that a telco startup would no longer need to worry about setting aside heavy capital investments to build cell towers, which cost around $100,000 (P5 million) per site.

Jacinto said US-based American Tower Corp., a global operator in this business with over 149,000 sites in its portfolio, had offered to participate. He noted that the Philippines needed an additional 50,000 cell towers, which would cost around $5 billion.

Other tower operators are welcome to participate, Jacinto said, adding that the government may also decide to invest in the venture.

Jacinto said more competition would ultimately result in lower prices and better internet quality for subscribers, which have criticized PLDT and Globe for having “slow and expensive” internet service.

At present, Globe and PLDT build and control their own cell sites, where radio equipment are installed to support services to subscribers such as calls, text messaging and internet services—where demand continues to explode.

In recent years, operators have complained about regulatory bottlenecks slowing down the construction of new cell sites, thus, preventing them from providing better services to the public.  For example, telco operators need to secure over 25 permits from local government units to build a single cell site—a process that could take over eight months.

PLDT and Globe presently have about 20,000 towers combined across the country—far below the 70,000 sites in Vietnam or the 90,000 sites in Indonesia, said Eliseo Rio Jr., acting secretary at the Department of Information and Communications Technology.

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“As a telco, we are required and must have our own network. Each telco has a specific design of its network to provide services to its customers,” Globe general counsel Froilan Castelo said on Thursday.

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