Cebu execs: NTC move to make telco sector more competitive

By Victor Anthony V. Silva |August 08,2016 - 10:31 PM
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Cebu business leaders welcomed the initiative of the National Telecommunications Commission (NTC) to auction a portion of 3G and 4G telecommunications frequencies within the term of President Rodrigo Duterte to help encourage the entry of a new telco player.

Jun Sa-a, executive director of the Cebu Educational Development Foundation for Information Technology (Cedf-it), said a third player would bring in healthy competition within the industry.

“Hopefully, (it will also bring) better internet services at a more competitive cost,” Sa-a told Cebu Daily News.

He said internet service is one of the components that make up the backbone of the IT-BPM (business process management) industry.

He said that with more efficient internet services at a lower cost, there can be a more competitive IT-BPM industry.

NTC plan

According to a recent Inquirer report, NTC Commissioner Gamaliel Cordova said the plan to bid out radio frequencies is seen to encourage the entry of a challenger to the PLDT-Globe Telecom duopoly.

Cordova said the frequencies would be reserved for a new player, preventing PLDT and Globe from bidding.

The possibility of another market player vanished when PLDT and Globe jointly bought out San Miguel Corp.’s Vega Telecom, which controlled valuable but unused radio frequencies, for close to P70 billion last May 30.

SMC gave up talks with potential partner Australia-based Telstra Corp. Ltd. in March following SMC President Ramon Ang’s worries about legal threats from PLDT and Globe, the report added.

Open industry

Glenn Soco, Mandaue Chamber of Commerce and Industry president, meanwhile, said this would be a step toward more efficient services for consumers.

“We need to open the industry to allow more players in the market,” Soco said.

He added that competition is always beneficial and healthy to consumers as it fosters better services and prices.

Furthermore, he said the government should also be more stringent with regulations in this area to protect the consumers.

PLDT-Globe Telecom’s acquisition of SMC assets are on hold while the Philippine Competition Commission, a newly created anti-trust body, reviews the sale transaction.

Radio frequencies

Radio frequencies are considered valuable and limited assets owned by the government which it uses for, among others, telecommunications.

The telco industry needs radio frequencies to transmit various forms of data, enabling phone calls and text messaging as well as internet browsing on smartphones.

According to a study conducted by internet metrics provider Ookla, the Philippines ranked 176th out of 202 countries in terms of average download speed with 3.64 Mbps.

The country’s download speed is eight times slower than the global average broadband download speed of 23.3 Mbps.

With this, the Philippines has the second slowest internet connection in Asia, even beating strife-torn Afghanistan, Ookla stated.

Industry leaders are bullish that the IT-BPM industry in the country will thrive more with better internet services.

IT-BPM jobs

At present, the IT-BPM industry has generated 300,000 jobs outside Metro Manila including 120,000 in Metro Cebu alone.

The industry closed 2014 with export revenues of $19 billion and is seen to increase to $25 billion by the end of this year, which is already at par with current overseas remittances.

In the Philippines, the industry has been growing at 15 to 18 percent annually while it only grows at five percent annually on a global scale.

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