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Companies question draft MC on common tower policy

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By Denise A. Valdez

SEVERAL STAKEHOLDERS raised concern over the proposed memorandum circular (MC) of the Department of Information and Communications Technology (DICT) and the National Telecommunications Commission (NTC) on common telecommunications infrastructure, particularly a provision that limited to two the initial number of tower companies allowed to operate.

The DICT and NTC held on Thursday a public hearing on the draft MC crafted by Presidential Adviser for Economic Affairs and Information Technology Communications Ramon P. Jacinto. Attendees included representatives from telco giants PLDT, Inc. and Globe Telecom, Inc., as well as five international and one local tower company.

Under the draft MC, a maximum of two independent tower companies may be registered by the NTC in the first four years of the implementation of the policy. After this, the NTC may register as many new tower companies as necessary, particularly in rural areas.

However, a representative from Norway-based tower company Telenor Group said the restriction could limit the number of towers that may be built during the period, which would be counterproductive to the government’s aim of improving telecommunications infrastructure in the country.

“The maximum of two (tower companies) may be a challenge for the mobile and for the industry…. It should not be two only, it should be as much as possible. And if operators can choose, the industry can grow, it will help us,” Shanshil Ahmed Shibly of Telenor subsidiary Grameenphone said.

American Tower Corp. and Frontier Tower Associates both said the government must ensure there are two or more tower companies will be accredited to guarantee improved services.

“I think when you hear the largest tower companies in the world, American Tower and Telenor, both say the same thing that two tower company licenses does not make sense, it’s a pretty strong statement. And I completely agree with that statement.” Frontier Tower chief executive officer Patrick Tangney said.

“To limit it to two tower companies, I think, would be a recipe for not having a lot of towers to be built. You will have a failure of commercial agreement between the tower companies, and the wireless operators would simply not agree to commercial terms,” Mr. Tangney added.

Mr. Jacinto stood firm on the draft MC’s provisions. “If you want five or six, why not a hundred? Why not 200? And then it’s going to get rowdy and nothing will be viable,” he said.

DICT Acting Secretary Eliseo M. Rio, Jr. welcomed the comments of the stakeholders to improve the policy. He previously said he personally prefers the accreditation of more than two tower companies.

“I have the last say, hindi si RJ (it’s not Mr. Jacinto). Ako ang [I’m the one] responsible for whatever (is decided). Ako ang pipirma eh, hindi si RJ [I’m the one to sign, not Mr. Jacinto],” Mr. Rio told reporters.

Aside from Telenor, American Tower and Frontier Tower Associates, the other international tower companies present were China Energy Equipment Co., Ltd. and IHS Towers.

Also present was local tower company ISOC Infrastructures, Inc., which submitted a P100-billion proposal to the DICT in July to build 25,000 common towers over a seven-year period.

At the same time, Globe questioned the provision requiring tower companies to be “independent” of mobile network operators. Mobile network operators are also not allowed to own any equity in the tower companies.

Globe general counsel Vicente Froilan M. Castelo said existing telcos have had difficulty in deploying towers due to the bureaucratic red tape that has caused delays in securing permits.

“We do not see how an independent tower company can alleviate or ease out the problems that we are facing. They are private companies, the same as us, and they are going to face the same problems… What we need right now is the easing out of bureaucracy in the government,” Mr. Castelo said.

Both Mr. Castelo and Mr. Jacinto said it takes 28 permits for a company to get the final go-ahead to build a tower.

However, Mr. Jacinto objected to the comments of Mr. Castelo, saying Globe and PLDT had lost their “moral ascendancy” to build towers.

“That’s the very reason why they cannot provide the service to the public,” he said.

In August, Globe secured the Securities and Exchange Commission’s (SEC) approval to incorporate a separate tower holding company. After securing SEC approval, Globe said it will begin divesting all or some of its tower assets to the new company.