Globe to NTC: Redistribute PLDT-Digitel's frequencies

Updated 29April2011 Mobile operator Globe Telecom has asked regulators to "level the playing field" by looking into the possibility of redistributing communications frequencies evenly among competing telecommunications companies. In a position paper sent to the National Telecommunications Commission (NTC) on April 26, Globe Telecom legal counsel Rodolfo Salalima called on the regulator to look closely into Philippine Long Distance Telephone Company's (PLDT's) acquisition of Gokongwei-owned Digital Telecommunications Philippines Inc. The deal, which is still pending review, would give PLDT a 70 percent share of the local mobile telecommunications industry — leaving Globe with just 30 percent. In a position paper filed with the NTC, Salalima pointed out that the ratio of the spectrum holdings of Globe and PLDT on the 3G 2100 Mhz spectrum stands at 1:3.5 in favor of the latter. 'Scarce public resource' In a press conference in Makati on April 28, Salalima argued that — with PLDT controlling more than thrice as many 3G frequencies than Globe — it would be difficult for the latter to improve its services because of limited resources. "If you don't give us the tools, the spectrum [frequencies] that we need, you kill us," the lawyer said. "All we want here is a level playing field. [The PLDT-Digitel deal], to our mind, is dangerous. When a carrier exercises so much clout, you are endangering the welfare of the public," Salalima added. According to Republic Act 7925, radio frequencies are "a scarce public resource" which the government is mandated to allocate to service providers to "meet public demand for telecommunications service". Efficient utilization However, PLDT officials dismissed Globe's claims, questioning why the latter chose to single out only particular frequencies in its position paper. "It's selective disclosure. They're cherry-picking," said Ray Espinosa, PLDT's head of regulatory affairs and policy. Espinosa pointed out that, given the total number of frequencies allotted per telco versus each telco's subscriber base, Smart has actually been "more efficient" in utilizing its resources. Smart said that it has an average of 406,000 subscribers for each of its 112.5 allocated frequencies, versus Globe's 303,000 subscribers on 87.5 frequencies. In an email to GMA News Online, Globe Telecom Network Technologies Strategy Division Head Engr. Emmanuel Estrada claimed that the figures provided by Smart were also lacking. "We cannot compare across all bands as, for example, the subscription figures shown by PLDT-Smart-Sun only accounts for 2G & 3G subs but does not account for those on its Broadband Wireless Subscribers using Canopy on the 5200 MHz/5400 Mhz band for which we understand PLDT-Smart-Sun also has about 123 MHz of spectrum on the 5400 MHz band," he said. Estrada said that, taking into account Smart's "undeclared holdings on (the) 5400 Mhz and 3400 MHz (bands)", Sun and Smart combined would actually have an average of 161,300 subscribers per MHz given a subscriber base of 60 million and 372 allocated frequencies. In contrast, according to Estrada, Globe has around 261,000 subscribers per MHz, given a subscriber base of 26.5 million and 101.5 allocated frequencies. "For a better apples-to-apples comparison, though, it would be best if we can get a breakdown of 2G and 3G subs and then compute the subs/MHz for the 2G spectrum and 3G spectrum," he said. 'Equity of real estate holding' In any case, Estrada said that Smart's figures are beside the point. "It is not an issue of subscribers per MHz but of 'equity of real estate holding' and cost efficiencies. The reality is, the lesser the amount of spectrum a telco has the more investments it needs to build the same capacity to sell relative to a telco that has more than enough spectrum. In effect, (the) cost to provide the service will vary and (the) telco with significantly lesser spectrum will have a much higher cost and can't stay competitive. If this is the case, there is no effective competition at all," he concluded. —VS, GMA News