Two out of five new small local telecom players which have obtained a franchise from Congress are now seeking regulatory approval for the rollout of a national broadband service and compete with the two incumbent telecom players.
A few months after receiving their franchise from Congress last year, Infinivan Inc and Megamanila Telecom Corp. filed their application with the National Telecommunications Commission (NTC) for a Certificate of Public Convenience and Necessity (CPCN) to construct and operate broadband services nationwide
The other telecom players which have received their 25-year franchises are Avocado Broadband Telecoms Inc. , Ama Telecommunications Inc. and Metro Connections and Telecom Corp.
Once Infinivan and Megamanila obtain their CPCNs from NTC, they can join the auction set this year of bundled frequencies.
The winning bidder would become the third player in the competitive mobile telecom market currently dominated by PLDT Inc. and Globe Telecom .
In a six-page document obtained by Malaya Business Insight, Infinivan said it has applied for a CPCN to construct, install, operate and maintain a national and international broadband and data services in all cities and municipalities in Ilocos region, Central Luzon, Calabarzon, Bicol and Metro Manila ( Regions 1, 3, 4-A , 5 National Capital Region, respectively), the municipality of the La Trinidad of the province of Benguet and Baguio City and to charge rates, with the prayer for issuance of provisional authority .
Infinivan was registered with the Securities and Exchange Commission (SEC) on April 20, 2015. The company is a holder of a franchise with a term of 25 years effective Aug. 18, 2016.
Enrique Yu, Infinivan president, urged the regulator to approve the company’s application to help improve internet services in the country .
“With the current lamentable state of the internet services in the Philippines due to the very slow data transfer rate of not more than 2 mbps (megabits per second) being provided by the present internet industry players and realizing the persistent demand or clamor of the public consumers for an alternative internet players with a reliable service of high-speed data transfer or internet access and the coverage is excellent , it is then inevitable coupled by pressing urgency that applicant’s proposed services be immediately granted since applicant will hugely improve the internet service in the Philippines ,” Infinivan said .
In preparation for the rollout , the company is in talks with foreign telecom players for the construction of a private submarine cable system to deliver broadband services nationwide.
“At present, (Infinivan) is actively engaged in discussion with foreign administrations of other telecommunications entities in other countries for the construction of private submarine cable systems connecting the Philippines to other countries which will use the latest and modern broadband technology,” the document said.
.Infinivan is in “discussions with international broadband suppliers/ providers for internet access services and applications , mobile broadband , rental services , including but not limited to bandwidth capabilities Ethernet lines , mobile hotspot device and routing from and to the Philippines with international destinations and/or territories,” the company added .
Edgardo Cabarios, NTC deputy director, confirmed Megamanila Telecom Corp. has submitted its CPCN application with the regulator last December.
Cabarios said Megamanila is seeking approval for the installation of international cable landing station in Nasugbu, Batangas where the dominant players have their own cable landing stations.
The facility will address the exponential demand for data services in the country .
Cabarios told Malaya Business Insight the entry of a new small telecom player will benefit consumers as it will further open up competition that will bring down the price of internet service and improve its speed .
“In economic theory, open competition is beneficial to the consumer, to society. The more franchises the better,” Cabarios added .
The new players are expected to compete in the fixed and wireless broadband where the untapped market is still huge and growth opportunity abounds.
PLDT and Globe have over 127 million mobile subscribers and less than 10 million fixed line broadband subscribers .
Cabarios said the new telecom player can compete with the two incumbent players but said it should be financially and technically capable to capture a substantial market share .
“ There’s a huge market for fixed and wireless broadband,” he added.
The frequencies to be auctioned off are 85 megahertz (MHz) that include 20 MHz from the 700 MHz frequency, a portion of the 800 MHz, 2300 MHz, 2500 MHz, 1800 MHz, 2300 MHz and 2600 MHz as well as the 10 MHz, third generation (3G) frequencies of Connectivity Unlimited Resources Enterprise.
These frequencies are enough to allow a third player compete with PLDT and lobe.
However, a third player is expected to face stiff competition with the two incumbent players which have been aggressively expanding their network in the past 20 years .
Cabarios had said that the new player should infuse at least P30 billion investment in the first two years of operation for the rollout of national network .
The new entrant must also be able to build at least 2,000 to 3,000 base stations nationwide to compete with giant PLDT which has over 12,000 base stations and Globe which has over 7,000.
Source: http://www.malaya.com.ph/business-news/business/telco-challengers-seek-broadband-license