Globe: PH Needs More Than Two Tower Companies to Catch Up
Globe Telecom has reiterated its call for the Department of Information and Communications Technology (DICT) not to limit the building of cell sites to two independent and private tower companies under the proposed common cell tower policy.
Globe General Counsel and Senior Vice President Atty. Froilan Castelo said the company supports the proposal to put up tower companies to address the lack of cell sites in the country. However, DICT should allow as many players as possible and should also allow current and future telcos to have a stake in them. “The proposed rule of limiting the entire tower sub-industry again only to two independent, private tower companies is anti-competitive, retrogressive, and against global best practice,” Castelo added.
The Philippines has a total of 16,500 cell sites only and needs an additional 50,000 towers at least to properly serve 113 million subscribers today.
“The establishment of tower companies in the Philippines will provide quicker deployment of cell sites, remove redundancy in tower locations, save capital resources, as well as provide a level-playing field for mobile network operators. Tower companies (towercos) can emerge as an important sub-industry of telcos,” Castelo revealed.
“We cannot see why and how only two towercos, private and independent at that, can help overcome the bureaucracy in building cell sites. Right now, it takes an average of 25 permits, and adding up the time to acquire right-of-way, it will take an average of 8 months to build a single cell site. These supposed two private independent towercos will not be better than us because they will be subjected to the same difficulties we are currently facing. With us telcos being prevented and handicapped to put up our own cell sites and leaving the builds to these two independent private towercos, there is no reason for us to believe that the number of cell sites deployed will improve,” Castelo added.
“The main objective should be to build more and augment the efforts of the telcos to densify the country with cell sites. It is not the establishment and giving favor to the business of towercos owned by private entities,” Castelo said
Under the draft policy rules, only two independent private tower companies with up to 100% foreign equity will be created to solve the infrastructure problem in the country. These two private firms will have exclusive rights to build, own, and operate 25,000 cellular towers in seven years, with mandatory sharing to all mobile network operators. This number however represents only half of what the country needs today to improve services. Under the proposed rules, mobile network operators will be prohibited from investing in the two independent tower firms as well as building their own cell sites and towers.
Castelo said the proposed common tower policy is contrary to the national policy under Section 4 of the Public Telecommunications Policy Act of 1995. The law states a “healthy competitive environment shall be fostered, one in which telecommunications carriers are free to make business decisions and to interact with one another in providing telecommunications services, with the end in view of encouraging their financial viability while maintaining affordable rates.”
He added that the draft is also in opposition to the Philippine Competition Act, which states that the government “recognizes that the provision of equal opportunities to all promotes entrepreneurial spirit, encourages private investments, facilitates technology development and transfer, as well as enhances resource productivity.” Telcos operate under a legislative franchise wherein Congress grants them the authority to build and operate a network. Likewise, the NTC has issued a Certificate of Public Convenience and Necessity to the telcos to build and operate their network. “This Department Circular cannot subvert the power of Congress. The draft circular is also in violation of the constitutional provision on non-impairment of contracts, as CPCNs are contracts in nature entered into by the government with the telcos.”
Globe Telecom is urging DICT to adopt an inclusive policy to solve the lack of cell sites in the country.
Castelo said that “current mobile network operators like Globe should not be prevented from building its own network, much less invest in a tower company. We should also have the ability to choose a towerco, which can best build for us cell sites based on our specifications and at the fastest possible time.”
Ready to share its own tower assets, Globe in August secured the approval from the Securities and Exchange Commission to establish a separate tower holding company. This will operationalize the divestment of all or part of its tower assets through a separate company. The company has also initiated talks with independent third parties for the divestment of its tower assets.
The lack of cellular towers has long been identified as the greatest barrier to seamless mobile internet connectivity with no viable short term solution due to permitting issues.