NTC issues revised 3G draft guidelines despite opposition

By Erwin Lemuel Oliva INQ7.net



DESPITE opposition from top players in the local telecommunications industry, the National Telecommunications Commission (NTC) has proceeded with issuance of the revised draft rules on the assignment and allocation of third-generation (3G) mobile telecommunications licenses and frequency bands on Friday.
A public hearing has also been scheduled on July 1, 2 p.m. at the NTC.

According to the new draft rules on 3G, five Philippine public telecommunications entities will be granted 3G licenses.

It also disclosed its adoption of International Telecommunications Union (ITU) standard frequencies for use in 3G. These frequencies are classified as international mobile telecommunications (IMT2000).

These frequencies allocated for 3G in the revised NTC draft rules are 825 – 845 Megahertz (MHz); 870 – 890 MHz; 1880 – 1900MHz; 1920 – 1980MHz; 2110 – 2170 MHz; and 2010 – 2025MHz.

The 825- 845 and 870 -890 Mhz frequency bands are currently assigned to existing mobile phone operators in the country.

In an accompanying memorandum, NTC explained that the proposed rules would provide a rational framework for awarding and assigning 3G licenses and their corresponding frequencies.

But both the landline giant Philippine Long Distance Telephone Co. and the mobile phone giant Globe Telecommunications have criticized NTC for pushing 3G, arguing that the local industry is not ready due to a low demand for it and the present high cost of handsets.

NTC however cited 134 the 3G licenses that have already been awarded in 48 countries and the 67 networks that have launched commercial services.

The total number of 3G subscribers has reached 22 million worldwide, a five hundred percent market growth in 2004 alone, with the Asia-Pacific region showing the strongest growth.

On the cost of handsets, NTC pointed out that there are more than 150 3G handsets launched in the market. It cited the US analyst Forward Concepts, which indicated that the number of mobile handsets for newer high-bandwidth technologies would grow sharply in 2005.

NTC also addressed the contentious issue of requiring existing mobile operators to bid for a 3G license.

Local operators had previously argued that since 3G is just an enhancement of 2G or 2.5G mobile services, they do not have to bid for 3G licenses but should be allowed to simply apply for the assignment of frequencies since they have a prior legal right as incumbent operators to the award of 3G licenses and frequencies.

NTC agreed that 3G is indeed a technical enhancement of 2 or 2.5G mobile services, but incumbent operators do not necessarily have the exclusive right, or are in the best position to be awarded a 3G license.

"The Commission believes that the status of the said firms as incumbents does not give these companies the prior legal right of establishing and providing 3G services, for obvious reasons," the NTC stated, citing Section 11, Article XII of the 1987 Constitution declaring that the operation of a public utility shall not be exclusive.

NTC also addressed a concern of local operators about the need to impose similar obligations on prospective 3G operators as the regulatory body does on existing mobile phone operators, particularly because of the national goal of installing at least 400,000 landlines.

NTC also indicated in its memo that rollout obligations will be more flexible this time, to allow 3G licenses faster expansion.

"The obligation imposed on the prospective awardee of a 3G license need not be as onerous or costly as to effectively detract service providers from engaging in this field," the regulatory body said.

NTC indicated that it would encourage a level-playing field for 3G-license bidding to allow healthy local competition.