Viable solution to telecom woes
When PLDT and Globe Telecom jointly bought in June 2016 the 700-megahertz frequency owned by a subsidiary of San Miguel Corp., they promised improved quality of Internet connectivity in the country within six months.
Although the purchase was (and is still being) questioned by the Philippine Competition Commission for failure to comply with its regulatory requirements, the public gave the deal the benefit of the doubt and kept its fingers crossed that the telecom duopoly will live up to its promise.
Those fingers may have to remain crossed for a longer time because 16 months since that boast was made the country’s broadband service is still in the pits.
President Duterte’s warning to PLDT and Globe to shape up or face the prospect of foreign competition has had no effect at all. With no competitor in the horizon that can give the duopoly a run for its money and spur it to give real value to its services, the public has no choice but bear with its inefficiency.
If at all, that third operator may come from the government in the light of the recent proposal of National Transmission Corp. (Transco) to engage in telecommunication services in addition to its authorized activities.
Transco was organized by Republic Act 9136 (or the Epira Law) to act as the system operator of the former National Power Corp.’s nationwide electrical transmission and sub-transmission facilities. That system is like a broad highway to which smaller roads link up to ensure smooth travel in the areas it traverses.
Aside from being used for transmission purposes, Transco’s towers and posts are also used by telecom companies, PLDT and Globe included, to carry the lines or wires that lead to their subscribers. This “co-location” arrangement, for which a certain fee is paid, reduces the operating costs of these companies because they do not have to put up additional structures for their wires.
Under the law, Transco can only operate transmission systems and it’s doing that through National Grid Corporation of the Philippines (NGCP) at present. If it wants to maximize or extract more value from its facilities by engaging in related activities without impairing its ability to perform its primary mandate, it has to ask Congress for authority for that purpose.
Allowing Transco to provide telecommunications services makes a lot of sense from the business and public interest points of view. It already has the infrastructure needed to provide telecommunications services to places where its towers are located, especially those outside the urban areas.
With the advances in technology, there may be no need to install two lines to separately provide electrical and telecommunications services in the same manner that fiber optic cables of telecom companies can simultaneously provide voice and data services.
Thus, two birds can be shot with one stone in the provisioning of electrical and communications services using Transco’s existing transmission infrastructure.
Some people may scoff at the idea of using wires or lines for telecommunications considering that wireless or satellite-based technology is the norm today in the industry. Under normal circumstances, that would be ideal, but the government simply does not have the funds to procure, operate and maintain expensive wifi facilities or satellite transponders for that purpose.
Considering the limitations imposed by our laws on foreign ownership of public utilities and the political clout of the duopoly, it would take a miracle to convince a foreign investor to come to the country to provide viable competition to the duopoly to improve telecommunications services.
Only the government has the resources and capability to do that and the proposal of Transco is a step in the right direction toward accomplishing that objective. Whether or not Congress would warm up to that idea and agree to amend Transco’s charter is, however, a different story.
In the meantime, while waiting for a miracle to come from the legislature’s end, we have to make the most of the sorry state of our telecommunications services and look with envy at residents of neighboring countries who do not have to contend with that problem.
