PCC says entry of more cell tower firms will benefit consumers, telcos

The Philippine Competition Commission (PCC) is pushing for the creation of more independent tower companies that will build cell towers and other communication infrastructures that may be shared by all telcos.

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The PCC expressed support for the Department of Information and Communications Technology’s (DICT) common tower policy as this will improve the delivery of communication services by mobile network providers.

“The PCC supports efforts to establish a comprehensive policy for the sharing of telecommunication infrastructure in the country, allowing public telecommunication entities (PTEs) to ‘share’ in the separately owned infrastructure of other PTEs in order to improve network coverage in developing the capacity of the country’s information and communications technology industry,” the agency said in its position paper released to the media on Tuesday, Nov. 13.

“Having shared towers ensures access to the necessary infrastructure for mobile telecommunications services. This would level the playing field for smaller players and new entrants that do not have the capital for building a broad network of towers to effectively compete. Without such tower companies, smaller players and new entrants can only provide wireless telecommunications services if given access to the existing towers of the dominant integrated telecommunications services providers,” it added.

The PCC said allowing the entry of more tower companies will benefit consumers and promote competition in the industry as it expressed concern on the proposed guidelines of the common tower policy by the DICT, which limits to only two independent tower companies registered with the National Telecommunications Commission (NTC) to build and share their towers for use of existing telco firms, as well as the new major player in the industry within the first four years of its implementation.

“The PCC emphasizes that entry or potential entry to the market ensures the existence of competitive pressure, which drives the business to be more efficient, aggressive and innovative for the benefit of consumers. Thus, imposing an entry barrier by limiting the number of players in the market would have adverse effects on market competition,” according to the PCC.

The agency said the business of constructing towers does not require “economies of scale or economies of scope” to ensure financial viability, as tower companies can build individual towers and earn from rentals paid by telcos wishing to propagate their services.

The commission further stated that the government must implement measures that will expedite the issuance of permits for the construction of communication facilities by telcos.

“Ultimately, interconnectivity and interoperability of telecommunications network technologies which use the infrastructure built by tower companies are necessary to ensure that the common tower policy translates to better telecommunications services. A strong and effective open access regime will complement the common tower policy in achieving the greater objective,” the PCC said.

Stakeholders in the telco industry have likewise urged the DICT to encourage the entry of more tower providers.

Globe Telecom said the government must implement measures that will ease the process in acquiring permits for the rollout of the cell towers.

The company has created an independent tower company with the exclusive purpose of building cell towers, whose incorporation was approved by the Securities and Exchange Commission last August.

For its part, Smart Communications said the draft guidelines violate the provisions of its franchise, which grants it the authority to construct, operate and maintain its own telco facilities.

Presidential adviser for ICT Ramon Jacinto, who supports the proposed guidelines, said during a public consultation on the common tower policy last September that Globe and Smart have lost the “moral ascendancy” to build cell towers in the country.

According to Jacinto, the government is committed on ensuring the financial viability of the independent tower companies.

Under the proposed policy, tower companies should be independent of mobile network operators and the telcos must not own any equity in the tower firms to promote tower sharing, non-discriminatory access, uniformity, and transparency in the leasing arrangements.

The DICT hopes to finalize the guidelines on the common tower policy before the end of the year.

The Philippines has one of the lowest tower densities in the world with less than 20,000 towers serving 100 million people. Recent studies reportedly indicate that an additional 50,000 towers should be erected to serve the current voice and data traffic.

The lack of cell towers has been identified as one of the barriers that results in slow and costly Internet services in the country. — Aerol John Pateña (PNA)

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