Olongapo Telecom & Information Technology

Saturday, December 23, 2006

Globe hits House move to recall 3G frequencies

Ayala-owned Globe Telecom assailed yesterday a House resolution asking the National Telecommunications Commission (NTC) to recall the 3G (third generation mobile technology) frequencies it has already awarded and to instead auction them off as a prescription for disaster since this would scare and drive away investors.

"House Resolution 190 is a prescription for disaster, just what the Philippines needs like a bullet hole in the head," it said.

It said the NTC order granting Globe the authority to utilize specific 3G frequencies and to operate 3G services had already become final and executory and not even the Supreme Court, much less the House of Representatives, can question or modify the same.

Almost a years ago, the NTC granted 3G licences and frequencies to several companies including Globe, Smart Communications, Digitel Mobile Philippines and Connectivity Unlimited Resources Enterprises (CURE). Both Globe and Smart have already spent several billions of pesos in 3G infrastructure and are already offering 3G service to the public.

Digitel, for its part, is planning to embark on 3G services next year while CURE is currently in talks with suppliers.

Globe noted that the action taken by the House calling for the recall of the frequencies and the revocation of the NTC order should not have been made since the NTC order is already final and no longer subject to review.

"It is even mandatory and ministerial for the NTC to enforce and execute its order and it has no power to revoke the same," Globe said.

It added that House Resolution 190 is an intrusion into the valid exercise of quasi-judicial functions of an independent administrative agency as the NTC, and a violation of the separation of powers since the House has no business meddling in the sole and exclusive power of the NTC, an agency of the executive department, in the granting of frequencies and authorities to operate in the telecommunications industry.

Globe also pointed out that since the House never attended the hearings conducted by the NTC prior to the grant to the four companies of the 3G spectrum bands, it cannot now be heard to complain.

It added since there are only four qualified applicants and five 3G frequencies up for grabs, there are more than enough spectra for all the qualified carriers and there is no ground to conduct a public auction to dispose of the frequencies.

The House resolution calls for the conduct of public auction in the award of 3G frequencies and licenses. It likewise noted that government would have earned a windfall of P15 billion to P25 billion had these frequencies been bid out, as was the experience in other countries.

Globe noted that under Republic Act 7925 or the Public Telecommunications Act, public auction can only happen when "demand exceeds availability."

It also pointed out that had the auction pushed through, given a bid floor price of P400 million for each of the five available 3G bands and assuming that each company bid on an "exorbitant and unrealistic" P1.2 billion for each, total proceeds could only run up to P6 billion.

"Thus the P15 billion windfall suggested by some members of Congress is purely speculative and without solid substantiation," Globe said.

The Ayala-owned company likewise emphasized that spreading the cost of 3G for operators over several years is prudent and wise. "Notably in Europe, due to the inability of operators to deliver against rollout and commercial obligations — the consequence of severe financial woes resulting from the hefty premiums bled out — many licenses had to returned," it stressed.

It added that if the best qualified Philippine operators had been made to bleed outright — the ominous danger of an auction — then one of the most promising and economically boosting industries of mobile telecommunications would be jeopardized.

"In the long run and in the bigger picture, this is simply unacceptable even when weighing against the purported instant billions to be gained from an auction. Truly, the NTC exists for public service, not as a revenue produce of the government," it said..

"Public service dictates that government should instead encourage the continuing provision of state-of-the-art technologies like 3G services by Globe and other carriers, and not to impede the same as intended by House Resolution 90," the telecommunications company noted.
By Mary Ann Ll. Reyes - The Philippine Star