House panel OKs bill mandating telcos to transfer cell towers to real estate firms

The House Committee on Information and Communications Technology chaired by Tarlac representative Victor Yap on Tuesday, Dec. 11, approved House Bill 7410 in consolidation with House Resolution 938, which shall be known as the “Telecom Tower REIT ACT.”

Principally authored by Bohol representative Arthur Yap, the consolidated measure seeks to mandate all telecommunications company to transfer their cell towers to real estate investment trust (REIT) corporations.

The bill mandates all telecommunications companies that are at least five years old and above to transfer all their telecom towers to a Real Estate Investment Trust (REIT) corporation in accordance with Republic Act No. 9856, otherwise known as “The Real Estate Investment Trust Act of 2009”.

In his sponsorship remarks, Yap explained that a REIT is a separate juridical entity where real estate owners, mall owners, property owners, tower owners with assets that have recurring incomes can dispose of these assets in the real estate investment trust and sell that REIT to the public.

He said there is a need to open up the use of highways for the telco industry, to open it up to the world players.

Yap said that based on the Department of Information and Communications Technology (DICT) report, the Philippines has one of the lowest cellular tower densities in the world with less than 20,000 towers serving a population of 105 million people.

“This is mainly the reason why the Philippines has the slowest Internet speed in Asean. More cellular towers in an area will decongest the network traffic which improves the Internet speed,” he explained.

Yap said that in a poll of about 22 Asian countries with fastest Internet speed, the Philippines tailed next to the last slot which was occupied by Afghanistan.

“For a country like us, with a vibrant economy, with a 105 million people, considering that we still want to expand our services to our people, this is unacceptable,” Yap explained.

Yap gave a comparison of the number of cell sites against the number of Internet users in the different countries.

“We have about 21,000 total cell sites against Internet users of around 47 million while Vietnam has 55,000 cell sites for 47 million Internet users. Malaysia has about 22,000 cell sites against 20 million Internet users. China has 1.18 million cell sites against 688 million Internet users,” he said.

He said this is the reason why the government has also been insistent in opening for a third telco player.

He explained that requiring the third telco player to put up their own infrastructure throughout the country is a barrier to competition.

“Because as we all know, one telco tower is going to cost more than P20 million to P30 million and will require close to 30 signatures from the local government unit (LGU) alone,” Yap said.

“So what happens to the towers here of Globe Telecom and Smart Communications or other telcos? They can now take their towers, put it in the REIT and sell their REIT to the public. And they get paid back,” he said. — Ma. Victoria Palomar

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