Corporate Securities Info

Positive signs in the telco industry

Things appear to be looking up for the telco industry.

Reacting to complaints by PLDT and Globe Telecom, President Duterte said there would be “no excuses, no mercy” for corrupt local officials who would delay infrastructure projects to improve connectivity.


Thereafter, a joint Congressional panel discussing the proposed Bayanihan to Recover as One Act, or Bayanihan 2, agreed to suspend for three years most of the permits needed to build new cell towers.

If things pan out as planned, the country can look forward to improved services next year, at the earliest, from the two existing telcos and newcomer Dito Telecommunity Corp.


That three-year suspension is not going to sit well with some “enterprising” local government unit (LGU) officials. They’re about to lose a cash cow and more.

By way of background, the construction, operation and maintenance of these towers involve two levels of approvals: national and local.

The “national” aspect primarily involves the National Telecommunications Commission (NTC), which examines the project’s technical specifications.

If it passes the NTC’s muster, which is often done professionally, the applicant company is issued the proper construction permit.

It’s the “local” part that is usually a pain in the neck and in the pockets of telcos.

Depending on the regulations of the barangay, municipality or city where the tower will be constructed, the company has to secure from those LGUs, among others, zoning and height clearances, barangay permit, environmental approval, consent of the people living near the proposed tower site and building permit.

It is common knowledge in the telco industry that the issuance of these permits or licenses does not depend solely on the submission of the required documents and payment of the corresponding fees and charges.It is standard operating procedure in dealing with LGUs for such paperwork to give “goodwill” money to the powers-that-be.Without the grease money (which varies depending on the appetite of the final signing authority), the application for permits or licenses may hibernate at the bottom of the pile.


For the more imaginative LGU officials, the “transaction lubrication charge” is not enough. They would demand (on the sly, of course) that some of the construction workers be sourced from their relatives or political supporters.

That’s not really a bad arrangement; it makes good community relations sense. But not when a certain percentage of the wages to be paid the workers has to be deducted prior to their payment and remitted to those officials.

What’s more, to supposedly ensure the safety of the construction materials from pilferage or damage, including maintaining the structural integrity of the tower when it is already operational, they would offer to provide security services, courtesy of the security guard company they own or have interests in.If the proposed tower site is near an insurgency-infested area, the payment for security services already includes the “revolutionary tax” the supposed insurgents will impose on the project.

Failure or refusal to meet these demands could mean surprise (and obtrusive) inspections of the job site for compliance with the conditions of the issued permits, occasional pilferages or, worse, getting threatening letters from alleged elements of the New People’s Army.It remains to be seen whether the three-year suspension on telco infrastructure permits would be scrupulously implemented to accomplish its objective, or the affected parties who stand to suffer financially from its enforcement would be able to come up with ways and means to go around it.

Let’s keep our fingers crossed the government is serious in improving the country’s connectivity and that there is no hidden agenda behind the sudden concern about the efficiency of the operations of existing telcos. INQ

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TAGS: Business, Globe telecom, PLDT, telco industry
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