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Darwin G. Amojelar
Manila Times

THE telecom industry is satisfied with the performance of the National Telecommunications Commission (NTC) but is urging the regulator to create a more business-friendly environment.

“The [telecom] industry has benefited from the liberalized regulatory environment that the NTC has implemented based on the law passed in 1995. We hope that it will continue because the past 10 years have shown that not only the industry but the customers have benefited from this kind of liberal regulatory environment,” Ramon Isberto, spokesman of Philippine Long Distance Telephone Co., the country’s biggest telecom firm, told The Manila Times.

Isberto added that the NTC should continue this kind of regulatory environment, as it is the best for both the industry and the consumers “because you’re dealing with an industry that requires a great deal of investment periodically. These investments have to be made because changes in the environment, advances in technology, are taking place,” he said.

Players in the cellular phone industry have invested about P700 billion to P800 billion since 2000.

Isberto said the NTC should maintain a business-friendly environment while at the same time protecting consumer welfare.

The NTC last month issued a draft circular imposing a P0.15 interconnection charge per SMS, which is lower than the current rate of P0.35.

The retail price of SMS consists of the cost of the network sending the message plus the cost of the network receiving it, as well as the cost of the interconnection.

At present, telecom companies charge P1 per text message.

A separate circular would also reduce the interconnection charge for voice calls to P1.50 or even lower per minute. This is 63-percent cheaper than the current rate of P4 per minute between mobile operators of separate networks.

These circulars were opposed by the telecom companies, saying they are contrary to law.

Isberto noted that there is no need to cut access charges because the telecom companies in general are now talking of lowering not just text and voice rates but also the broadband Internet usage rates.

Froilan Castelo, Globe Telecom’s head for regulatory affairs, praised the performance of the NTC as “good.”

“The de-clogging of the cases is very important,” Castelo, who is also president of the Telecommunications and Broadcast Attorneys of the Philippines (Telebap), said. He was referring to cases lodged by consumers against the telecom companies as well as petitions of the companies for extension and renewal of provisional authorities, certificates of public convenience and the like.

Eric delos Reyes, the president of Philippine Association of Private Telephone Companies Inc. (Paptelco) agreed with Castelo.

“Very good, what is worth noting is the big number of cases that they have decided. I think it’s a very good performance,” delos Reyes said.

He added that the NTC’s policies are consistent with the direction of the government to provide cheaper and affordable communications.

The NTC reported that as of June, the regulator issued 886 orders and decisions compared to 310 in the same period last year.

These include extension and renewal of provisional authorities and certificates of public convenience and/or necessities on various telecom services, radio and television networks, and cable television operations, among others.

The telecom regulator has also issued circulars on interconnection of local exchange carriers (LEC) in local calling areas, which require telecom companies to connect their networks.

NTC has also issued a circular on value-added services to open the market to more players. This will enhance competition in the market and bring about other benefits to the industry and the consumers.

Darwin G. Amojelar
Manila Times

THE National Telecommunications Commission (NTC) said the wireless landline (WLL) service revived telecom companies’ landline business last year.

Data from NTC showed that the fixed line subscribers rose by 8 percent to 3.9 million last year from 3.6 million in 2006. The landline business had fallen on hard times due to the popularity of text messaging or SMS (short messaging service).

Edgardo Cabarios, director of NTC’s common carrier and authorization department, attributed the increase in the number of landline subscribers to the rising demand for wireless landline in Metro Manila and other parts of the country.

“There is a market for this kind of service as people want mobility at a cheaper rate. The trend now is that people want to move because of the cell phone. They want mobility while moving around,” he said.

Bayan Telecommunicaions Inc., which started the WLL in the second half of last year posted a 60 percent growth in landline subscribers to 379,724 from 227,057 in 2006.

Rival Philippine Long Distance Telephone Co. (PLDT) recorded a 5- percent increase in subscribers with 2.1 million last year from 2 million in 2006. Globe Telecom Inc. and unit Innove Communications Inc. had 329,908 subscribers last year.

At end-March, PLDT Landline Plus subscribers stood at 75,000, of which 60,000 are postpaid and 15,000, prepaid subscribers. Bayan had 160,000 subscribers.

Globe and Digital Telecommunications Philippines Inc. (Digitel) also offer wireless landline service through Mango and Globe Wireless Landline, respectively.

The International Data Corp. earlier said that the WLL service is becoming more popular in certain markets as operators use the technology to offer unlimited voice calls that resemble services offered by traditional landlines.

Despite the wild success of Global System for Mobile communications (GSM) mobile services, there remains significant pent-up demand for wireless landline as the pricing of GSM services makes frequent calls unaffordable to many, the research firm said.

Cabarios said that despite soaring food and oil prices, telcos are expected to sustain the double-digit growth of mobile phone subscribers this year.

At end-2007, the NTC said the country’s cellular phone subscribers grew 25 percent to 57.3 million from 42.9 million in 2006.

Of the total , Smart Communication Inc. and Pilipino Telephone Corp., (Piltel) had combined subscribers of 30 million, while Globe had 22.8 million.

Digitel recorded 4.5 million subscribers while Eastern Telecommunications Philippnies Inc. and NEXT Mobile had 10,374 and 22,441, respectively.

Manila Standard

Soaring food and fuel prices will affect revenues of telecom companies this year, said Globe Telecom president and chief executive Gerardo Ablaza Jr.

Ablaza, in a briefing at the New World Renaissance Hotel in Makati City yesterday, said that while revenues from wireless business would continue to grow, this will be at a pace slower than last year’s, as consumers are expected to reallocate spending amid rising prices that undermine growth prospects.

But Smart Communications president Napoleon Nazareno said the accelerating inflation rate had yet to affect the company’s revenues, which remain growing at a healthy pace. Smart is the country’s largest mobile phone service provider.

Globe Telecom, the country’s second largest mobile phone service provider, posted a flat growth in its revenues in the first quarter of 2008, although its net income surged 32 percent from a year ago, owing largely to last year’s prepayment of P1.3 billion in debt.

The company closed the first quarter with consolidated service revenues of P15.539 billion, at par with last year’s level of P15.609 billion amid a more difficult macro-economic environment in the first quarter of 2008.

Net income jumped to P3.4 billion in the first quarter from P2.6 billion a year earlier, which was traced to Globe’s prepayment of $300 senior notes last year.

But Ablaza said after posting a flat growth in the first three months, Globe’s revenues grew faster in April, with the net addition of more than 400,000 subscribers.

As of April, Ablaza said its SIM base topped 21.7 million subscribers. This was higher than the average monthly net addition of 320,000 new subscribers in the first quarter, he said.

Ablaza said the company would focus on building its broadband infrastructure for future growth. Globe’s broadband and corporate data continued to be the main drivers of growth for the business, posting revenue growth of 73 percent and 15 percent, respectively, he said.

While the company’s wireless business revenues fell 1 percent, wireline revenues rose 6 percent, driven by the continued growth in the company’s broadband and corporate data businesses.

Roderick T. dela Cruz

Darwin G. Amojelar
Manila Times

TWO leading mobile phone service providers on Wednesday reported net additions to their respective subscriber bases last year, boosted by cheaper call and short messaging system (SMS) rates.

Ma. Lourdes C. Rausa-Chan, Philippine Long Distance Tele-phone Co. (PLDT) corporate secretary, told the Philippine Stock Exchange that its wholly-owned subsidiary, Smart Communications Inc. has more than 30 million subscribers using its Global System for Mobile communications (GSM) network at end-December.

In addition, Smart also has more than 1 million active Smart Money account holders and nearly 300,000 subscribers using Smart Bro, the wireless broadband service of its unit, Smart Broadband, Inc.

Last November, the company announced that it raised its capital expenditure to P10 billion in 2007 to finance network coverage expansion.

Separately, William Pamintuan, Digital Mobile Philippines Inc. senior vice-president for legal and inter-carrier services, reported to the National Telecommunications Commission (NTC) that Sun Cellular’s subscribers reached more than 5.5 million as of December, higher by 2 million in 2006.

Pamintuan attributed the increase to the expansion of its network coverage and continued offering of cheap call and text plans.

Digitel has expanded its coverage to 87.78 percent last year, and expects to increase it to 91.14 percent by middle of this year.

Digitel is also seeking an approval from NTC to extend its nationwide cellular mobile telephone service license, which will lapse on February 7.

As of December, Digitel has covered 108 out of the country’s 119 cities or 90.76 percent and 62 out of the country’s 81 provinces or 76.54 percent for an average coverage of 83.65 percent or higher than the minimum required coverage the NTC set.

The NTC has required the company to cover at least 80 percent of all provincial capitals in the Philippines including chartered cities and to submit an amended roll out plan forecast for the next three years to approve a Certificate of Public Convenience and Necessity (CPCN).

The Gokongwei-owned telecom company assured that once the license was approved it will continue to offer affordable call and text plans for its subscribers.

Digitel also assured the NTC to continue its commitment to offering convenient and affordable plans that will reflect the regulator’s policy to ensure that consumers are not deprived of wider choices and to encourage competitive and innovative offerings.

Darwin G. Amojelar Reporter
Manila Times

National Telecommunications Commission (NTC) on Thursday projected that mobile-phone subscription would grow by double digits this year and next, fueled by strong overseas Filipino workers’ (OFWs) remittances and overall economic growth.

Edgardo Cabarios, director of the NTC’s Common Carrier and Authorization Division, told reporters that the number of mobile-phone subscribers this year is expected to reach 55 million, higher than last year’s 42.9 million.

For next year, Cabarios said, that number may rise to between 60 million and 65 million.

“We expect a steady growth in mobile-phone subscribers next year because of the rising OFW remittances and improving economy,” Cabarios told reporters.

At end-September, Philippine Long Distance Telephone Co., which cornered about 57 percent of the cellular market, registered a subscriber base of 28.3 million. Its unit Smart Communications Inc. recorded net additions of about 2.7 million subscribers, while its Talk ‘N Text brand under unit Pilipino Telephone Co. added about 1.4 million to end the first nine months with 19.9 million and 8.3 million subscribers, respectively.

Globe Telecom Inc. and Digital Telecommunications Phils. Inc. registered 19.2 million and more than 3 million subscribers, respectively.

The increase in subscribers means higher revenue for these telecom companies.

At end-September, the country’s three largest telcos posted combined revenues of P153.77 billion. Of this amount, PLDT generated P100.5 billion; Globe, P47.2 billion and Digitel, P6.07 billion.

An IDC forecast showed that the country’s telecom market remains upbeat, with an 11-percent compound annual growth rate (CAGR) in revenues seen over the next five years.

The international research firm attributed the growth to the data services segment, boosted by strong uptake of text messaging and Internet connectivity, as well as price pressures and data communication substitutions on voice services.

IDC estimated that the industry grew by 6 percent last year, generating $2.956 billion in revenues.

Darwin G. Amojelar, Reporter
Manila Times

FILIPINOS hoping to spend more time during the Christmas holidays talking to loved ones abroad over the Internet may have to settle for their landlines or mobile phones, as large telecommunications companies bucked a proposal to bring down the access fee they charge voice over Internet protocol (VoIP) service providers, an official of the National Telecommunications Commission (NTC) said.

Edgardo Cabarios, chief of the NTC’s Common Carriers and Authorization Division, told reporters that Philippine Long Distance Telephone Co., Smart Communications Inc., Bayan Telecommunication Inc., and Globe Telecom Inc. have raised their opposition to a proposed cut during the preliminary hearing on additional rules for VoIP.

Cabarios said telcos insisted that access charges should be “negotiated.” He added that the NTC ordered the telcos to submit their position papers next week.

The NTC official said lowering access charges will expand the growth of the VoIP market in the country, adding that current rates remain very high.

A cheap alternative to traditional telephony, VoIP involves transmitting voice calls through the Internet thus making them less expensive.

The regulator’s additional guidelines for VoIP came on the heels of complaints from VoIP service providers and from Congress that the access charge imposed by telcos remains exorbitant.

At present, landline calls are charged an access fee of $0.12, while mobile-phone calls incur $0.16 charge.

Under the proposed rules, the VoIP service provider shall be interconnected to at least one public switched telephone network, which shall be responsible for the routing of VoIP calls to other networks.

The switched network operator will be compensated a transit charge of not more than P0.25 a minute, whereas the access charge on VoIP calls should not be more than P1 a minute.

For mobile telephone interconnection, VoIP service providers should be interconnected to at least one network, which should be compensated a transit charge of not more than P0.50 a minute.

“The access charge paid to [the cell-phone network] where VoIP calls originate or terminate shall not be more than P1.50 a minute,” the NTC rules said.

It added that no interconnection agreement is required if VoIP calls originate from or terminate to broadband access networks.

“The access charge paid to [switched network operators] is different from the access charge paid to [cellular network operator] because of mobility. There is premium in mobility,” the NTC said.

Two years ago, the NTC opened up VoIP as a value-added service, which means that non-telcos may offer it to the public.

Under the VoIP circular, service providers have to register with the NTC and forge an agreement with the local telco. With the service classified as value-added, telcos were required to open their networks to VoIP service providers.

The telcos had objected to the classification of VoIP as value-added since international voice calls have been a major source of their revenues.