Biz Buzz: Special frequency
EVEN as negotiations are still ongoing between San Miguel Corp. and Australian giant Telstra to form a third player for the local telecommunications market, the prevailing duopoly of PLDT and Globe Telecom have already brought out their knives.
Last week, the Ayala-controlled Globe issued a statement urging government to force San Miguel to loosen its stranglehold on the 700 megahertz frequency band which is so valuable in the telecommunications industry.
This came a couple of days after PLDT also started making noise about how the government should compel San Miguel to share this frequency with other players.
For the uninitiated, this 700 MHz is a precious commodity because of its special characteristics: it can broadcast signals over a longer range compared to frequencies used by Globe and Smart today, and it can also broadcast with greater power (which allows signals to penetrate buildings and even basements, without the need for booster equipment, we’re told).
And most importantly, this is the frequency that is being used for Long-Term Evolution (LTE) mobile services which emphasize Internet data transmission over voice and text.
In other words, the holder of the 700 MHz frequency can set up comparable or better network coverage than existing players at lower cost—savings that would hopefully translate to cheaper services for the end user.
And how did San Miguel end up owning so much of this precious frequency? We understand that Ang started buying up all these dormant companies which held the licenses for these frequencies many years ago, long before LTE and smartphones became the “in thing.”
So is SMC president Ramon Ang willing to loosen his grip on the 700 MHz band?
“Sure!” he replied with characteristic enthusiasm. “I told them they can share in the use of the 700 MHz frequency if they allow me to use the frequencies they hold now, too.”
“Let’s put all our frequencies on the table and share,” he said. “But they didn’t want to. They want to use what’s ours but they don’t want us to use what’s theirs?”
In any case, don’t expect Globe and Smart to give up easily as they will most likely elevate this issue to telecommunications regulators (who, in turn, will likely seek guidance from Malacañang).
Asked whether there’s space in the local market for a third player, Ang pointed to the hefty profit margins currently being enjoyed by local telcos.
He said that, around the world, telecommunications firms have an average profit margin of 30 percent. In the Philippines, however, the telco duopoly have an average profit margin of 65 percent.
“We’re OK if we make less than that,” he said. “If the competition we bring in manages to bring down industry margins to 30 percent, we’ll be very happy. And Filipino consumers will be the winners.”
So will all these plans play out the way he’s predicting. Word on the street is that Filipino consumers will find out by the second quarter of 2016. Daxim L. Lucas
Three more years
IT WAS not too long ago that EastWest Bank president and CEO Antonio Moncupa started sending out signals that he was entertaining thoughts of retiring from banking and going into politics.
Well, word on the street is that that plan is now on hold indefinitely.
We’re not quite sure if the decision of Moncupa—a hardcore Leftist who was detained by the Philippine Constabulary in his youth—was influenced by the fact that he would have had to go up against an established political family in his home province of Bataan, or perhaps the promise of a better deal at his current bank for him to stay on.
But Biz Buzz learned recently that Moncupa agreed to stay on as EastWest CEO for three more years.
What will now happen to former RCBC treasury man Toto Hilado who was hired ostensibly as Moncupa’s next-in-line as markets group COO? Or another prospective CEO-in-waiting, Gerry Susmerano, for that matter?
Well, given Moncupa’s term extension, everyone will now have to wait three more years. Daxim Lucas
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