Telcos View: San Miguel’s Control of 700 MHz Spectrum Seen as ‘Anti-competitive’

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Local telecommunications companies have described as ‘anti-competition’ San Miguel Corporation’s hold over the entire 700 MHz band, reiterating calls for the frequency to be equitably distributed in a transparent manner among existing operators and new entrants.

Both PLDT and Globe Telecom have, since 2008 and 2005 respectively, repeatedly requested for an allocation of the 700 MHz frequency from the National Telecommunications Commission (NTC), which to date has not acted on these applications. The two companies stressed the need to distribute the unused frequency to help bridge the gap in Internet speeds between the Philippines and other countries in the region.

“What is anti-competitive is the present situation where San Miguel controls the entire 700 MHz band, as well as substantial unutilized chunks of radio spectrum in other frequency bands through various corporations,” said PLDT and Smart Communications Head of Public Affairs Ramon Isberto in a letter to the Manila Times.

“Our position on this matter has been consistent. Since 2008, we have asked that the 700-MHz radio frequency band be reassigned from broadcast TV to mobile telephony and the said frequency be equitably distributed in a transparent manner among existing operators and new entrants,” reiterates Isberto in the said letter published last week.
Spectrum is the “real estate” on which telecommunication operators develop their respective network to deliver services to customers. The amount of spectrum assigned to a telco impacts the cost the build capacity, overall network performance, ability to offer new multimedia services and general customer experience of wireless services.

Utilizing the 700 MHz would allow the deployment of a high-capacity LTE based wireless and fixed broadband network to deliver higher data rate and LTE wireless broadband service. With the use of the 700 MHz frequency, broadband prices can go down further benefitting consumers.

PLDT rival Globe Telecom vowed to exert all effort towards achieving an equitable distribution of the 700 MHz spectrum as it underscored the significance of the frequency in elevating the state of the Philippine internet.

“We hold that position that the 700 MHz frequency should be reallocated for the benefit of the country and the industry. We have been calling on the NTC to do this since 2005 and we will continue to exert all effort to get that reallocated. In an era of very scarce spectrum resource globally, we should be utilizing all our resources in delivering high speed data to our customers,” Globe General Legal Counsel Froilan Castelo said, noting that the Philippines and Thailand are the only countries in the Asia Pacific with major issues preventing their allocation of the 700 MHz band to mobile broadband technologies, according to data gathered by the GSMA. “We continue to call on the government and our regulators, in particular, to ensure the equitable distribution of that spectrum throughout the industry,” Castelo emphasized.

The companies’ statements came at the heels of the announcement that former Economic Planning Secretary Arsenio Balisacan has been named the first chair of the Philippine Competition Commission (PCC), which is tasked with ensuring fair competition in the business sector, and preventing anti-competitive agreements, mergers or acquisitions that substantially restrict competition, and foster abuse of dominant position.

Balisacan said that one of the sectors the PCC will focus on is the telecommunications industry, which should naturally include a study of the 700 MHz issue and how San Miguel has been able to obtain and maintain control of the scarce frequency to in spite of calls for a public bidding. The need for the PCC to act on the frequency issue is made more critical by the glaring lack of NTC action, despite moves by governments all over the world to reassign the use of 700 MHz frequency band from broadcast TV to mobile telephony.

The European Commission has in fact finalized a proposal just this February, to coordinate the use of the 700 MHz band across the European Union to make it available to mobile operators. In particular, EU hopes the spectrum will eventually help foster next generation 5G mobile via ‘special services’ able to do demanding things like controlling autonomous cars, connecting health monitoring equipment and other technologies.

Isberto said that governments have taken this action to help bridge the “digital divide,” as the 700-MHz band is well suited to mobile data technologies and will make it easier and faster to deliver internet services, even in rural areas.

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