The Philippine Long Distance Telephone Co. (PLDT) group’s P2.12-billion price tag for the third-generation (3G) wireless frequency held by one of its subsidiaries is too high and would restrict bidding for the precious asset to only the country’s biggest phone firms.
PLDT, through unit Smart Communications, surrendered the 3G frequency held by Connectivity Unlimited Resource Enterprises (CURE) to the National Telecommunications Commission (NTC) last week. This was in compliance with a government condition—meant at preserving a competitive environment—imposed on PLDT following its takeover of the Sun Cellular network.
“It looks high. The contemplation is only the value of the congressional franchise and spectrum,” a senior telecom industry veteran said.
The PLDT group was allowed by the NTC to demand a cost-recovery fee (CRF) for the 3G frequency. The fee would cover the costs involved in migrating CURE subscribers into the Smart network, which the group was forced to do before letting go of the frequency.
“They have not presented any evidence that they bought any equipment for CURE. If the cost recovery is too high, then bidders will be discouraged. Parties would only be willing to bid at reasonable amounts,” he said.
He said pricing the frequency too high would also deprive the government of the potential to earn from the bidding. Any amount in excess of the minimum CRF asked for by PLDT—an amount still subject to government approval—will go to state coffers.
Given their deep pockets, PLDT rivals Globe Telecom and industry newcomer Wi-Tribe, controlled by San Miguel Corp., are the early favorites to win the CURE frequency. Both firms have expressed their desire to bid for the frequency. Smaller players such as Lopez-led Bayantel and MTI are also expected to make a bid for the franchise.