Long before Australia’s largest operator Telstra has even come close to working out a deal with conglomerate San Miguel Corp (SMC) to create a viable third player in the Philippines, the duopoly of PLDT and Globe Telecom has called on the regulator to auction off part of the valuable 700MHz spectrum held by SMC’s units.

Telstra announced in a filing to the stock exchange in late August that financing was being sought for a wireless joint venture in the Philippines with SMC. Telstra reportedly will take a 40 per cent stake in the venture, which will invest $1.5 billion to $2 billion over the first three to four years.

SMC owns 90MHz out of 100MHz in the highly efficient 700MHz band, with the company’s Wi-Tribe holding 80MHz and High Frequency Telecommunications allocated 10MHz. New Century Telecommunications holds the remaining 10MHz.

Globe released a statement on Friday saying that the “equitable distribution of the unused 700MHz frequency held by San Miguel Corp will help improve internet speed in the country”.

“Part of the solution to the clamour for faster internet is the harmonisation of the 700MHz frequency,” said Globe general legal counsel Froilan Castelo. “Giving active and operating telecommunications companies access to this band will allow the industry to provide broadband and data services at faster speeds and in a more cost-efficient manner,” he added.

Unused asset
PLDT’s head of regulatory affairs, Ray Espinosa, echoed that sentiment, stating that the 700MHz band is “very important for providing local networks the ability to attain much needed speed” and asked for a “fair allocation” of the band.

Both operators emphasised that since the spectrum is “highly underutilised,” it should be reallocated.

Globe and PLDT years ago asked the National Telecommunications Commission (NTC) for an allocation in the 700MHz and 800MHz bands, but the regulator never approved those requests.

Globe pointed out in its release that troubled WIMAX provider Liberty Telecoms, SMC’s holding firm for Wi-Tribe, was placed under corporate rehabilitation and debt restructuring in 2005, but it didn’t mention that the firm made an early exit from corporate rehabilitation in May after a Makati court closed the proceedings.

SMC consolidated its growing telecoms holdings over the past few months, with a subsidiary in July acquiring a 100 per cent stake in its wireless broadband venture Liberty Telecoms by purchasing the outstanding shares from its three partners.

Its holding in the efficient 700MHz band no doubt attracted Telstra’s attention, so any attempt to redistribute that allocation, which could take years of litigation, might scare off the foreign suitor that is looking to inject some much-need competition in the Philippines market.

Based on the tactics used by PLDT to thwart Globe’s acquisition of Banyantel over the past two years, Telstra needs to take a long-term view and have the patience of Job. Consumers in the country, which had the second slowest average broadband downlink speed among 22 countries in Asia in May, have already been patient for years.

Hopefully the NTC will help speed the process along for the early entry of a third operator.

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.