The Market Monitor Minding the Nation's Business
There is an interesting tug- of -war between telco giants Philippine Long Distance Telephone Company and Globe Telecom, on one hand, and upcoming telco entrant San Miguel Corp. in partnership with Telstra of Australia, on the other, that concerns the allocation of an important band that is deemed crucial to Internet penetration.
This is the 700 megahertz (MHz) band, which is seen to ensure lower Internet costs and faster connection. No less than Ericsson Philippines and Pacific Islands head Sean Gowran subscribes to the critical importance of the 700 megahertz band to the economic costs of Internet connection that has long hobbled the Philippine telcos.
700 MHz is the lowest band available for cellular communications in the Philippines. The lower the band, the greater coverage you get… which means you have a lower capital investment to cover an area. We have pretty good service for the urban areas. To really provide universal coverage, you’ll need the 700 MHz, Gowran was quoted as having said in the same vein that he stressed the band is crucial to underserved and rural areas.
Since the band is an important cog in Internet coverage, the government is thrown between deciding whether to allocate the 700 megahertz band among the telcos so that underserved and rural areas get covered, and allowing SMC to lord it over the band. SMC, as the Market Monitor reported, has been dutifully paying the fees for the 700 megahertz band without fail and, therefore, should have sole access to it.
That is a difficult decision that the government must wrestle with. Should the government allow the whole telco industry to take part in the delivery of cheaper and faster Internet via the 700 megahertz band, or just let a new entrant, the SMC –Telstra combine to monopolize the band? After all, it was paying for the band for a long time.
Almost a Catch-22 situation, the government would, however, have to rely on the need to satisfy a nobler objective – the long-felt need not just for a cheaper but faster Internet coverage that could only be had from having the 700 megahertz band. We believe this is a no-brainer for the government to allocate this critical band among the players
As Gowran surmised, there is a heightened need for the 700 MHz to be allocated among the telco players as it is deemed critical for the telco operators to roll out affordable services and introduce higher data space. Now that, we believe, is a far nobler cause than letting a new entrant monopolize the band. As my favorite teacher is wont to say: between the nation and a company, there is no dilemma whatsoever in making the right choice.
Thus, it is incumbent upon the National Telecommunications Commission to allow the allocation of the 700 megahertz among the telco players since this would mean high subscription penetration even in the rural areas. That means bringing the rural areas at par with those in the metropolis and that democratization of Internet coverage would ultimately redound to the country’s economic benefits.
Now, why do we say that it is a no brainer for the government to decide in favor of the greater majority of the people benefitting from the low-cost but faster Internet coverage. All that the NTC would have to do is to rely on the findings that the recent World Radiocommunication Conference bared in its conference last month in Geneva. In that meeting, the members of the International Telecommunication Union asserted the need to harmonize the 700 megahertz band all over the globe because of its economic impact.
Were NTC to allow just SMC to lord it over the 700 band, it would defeat the very purpose for which the nations all over the globe are being asked to harmonize the band. Why, even Europe, the Middle East and Africa are now calibrating their 700 megahertz band for their telco industry, not to just one telco player.
So in this tug-of-war, the government – or the NTC, for that matter – has no other recourse but to let all telco players participate in the 700 megahertz band. There are no ifs, ands or buts here.