3rd telco contender banks on satellite internet to win bid

LCS–TierOne Consortium announced its readiness to bid for the third telco slot this week as it outlined an early strategy that will rely on satellite-based internet and portable cell sites for the quick delivery of services across the Philippines.

Ilocos politician Luis “Chavit” Singson, who heads the LCS Group of Companies, a member of the consortium, said the group had invested an undisclosed sum in a broadband satellite.

Singson said the satellite is being built by American aerospace giant Boeing and that it will be launched by 2019.

Singson said the use of a broadband satellite is a key part of their strategy to immediately reach customers, including those in far flung areas without a traditional telco connection.

He added that this was the consortium’s edge over its competitors, which include telco giants such as South Korea’s KT Corp. and China Telecom.

“We’re the only one among the bidders with a satellite. That’s our big advantage,” Singson said in the interview.

Satellite broadband is typically used to cover gaps in an existing telco network. The reason, according to experts, is that satellite-based signals tend to suffer from longer lag times and are prone to weather disturbances.

In response to those issues, Singson said they will also lay down fiber cables, tap the spare fiber assets of the state-run National Transmission Corp. (NTC) and partner with smaller internet service providers.

“We will partner with anyone who wants to partner,” he said.

Singson said using satellite broadband will give the group immediate nationwide coverage, thus, allowing the consortium to score high marks in terms of national population coverage— a major criterion to be used by the NTC and Department of Information and Communications Technology (DICT) in evaluating bids. The two other major criteria were internet speed, which will be monitored regularly; and capital investment.

The consortium claimed that its broadband satellite will be capable of delivering internet speeds of up to 100 Megabits per second to users. Traditional telcos offer similar plans, but Singson said they will sell their services at much lower rates, without elaborating.

Another key aspect of LCS-TierOne’s strategy is its so-called telco-in-a-box. These are solar-powered modified cargo containers that will function as all-in-one cell sites, WiFi hotspots, and retail centers. The consortium plans to roll out about 20,000 of the facilities across the Philippines, which would roughly approximate the combined network of PLDT Inc. and Globe Telecom.

Singson said they will also allow a franchise model where entrepreneurs or local cooperatives will operate these mobile cell sites.

“It’s like an automatic dealership,” he said, adding that operators can sell other goods such as refurbished cellphones and items a community might need. He estimated the franchise fee at around P1 million, however, he said this could be brought down further.

The DICT and the NTC are seeking to award frequencies to a third mobile player that will compete with incumbents PLDT and Globe, which control a market of about 100 million people. The overall objective was to improve services and lower costs— a key promise of President Rodrigo Duterte. The deadline of submission of bids was set on Nove,ber 7 this year. Offers will also be opened on the same day, DICT acting secretary Eliseo Rio Jr. had said.

A total of 10 companies had acquired bid documents as of October 31 this year.

These were foreign groups Norway’s Telenor, China Telecom, Austria’s Mobiltel Holding GMBH, as well as Philippine Telegraph and Telephone Corp., Telecommunications Technology Solutions Inc., Streamtech Systems Technologies, Udenna Corp., LCS-TierOne, NOW Telecom and AMA Telecommunication Corp.

Last week, it was announced that Telecommunications Technology will partner with KT while Streamtech, owned by the family of businessman and former senator Manuel Villar Jr., said it will not join the third telco race. /kga