DICT to pursue common tower policy even without third telco

The Visayan Daily Star | February 4, 2019

The Department of Information and Communications Technology is pushing through with the
implementation of its common tower policy even without the entry of a new major telco player.

DICT Acting Secretary Eliseo Rio Jr. said this will allow cell tower firms to build and deploy
communication infrastructures that may be leased to telcos to further improve the delivery of their
services to the public.

“We will go ahead with the common tower initiative even if we have only two telcos because the fact
remains that we still need an additional 50,000 towers to improve our connectivity,” Rio said in a
statement.

“Common towers can bring down the cost of our telecommunication services so there is definitely a
need for this initiative, whether we have two or three or even four telcos,” he added.

He made this reaction amid issues regarding the validity of the franchise of the third telco player.

Various lawmakers have expressed concern that Mislatel Consortium, a joint venture of Udenna Corp. of
businessman Dennis Uy and Chinese state-owned firm China Telecom, has failed to comply with the
conditions of its franchise as it has not operated within a year after the franchise was granted and sold
70 percent of its shares without congressional approval.

Mislatel was granted a legislative franchise in 1998 with a specific provision to commence operations
within one year from approval.

Rio estimated that the common tower initiative would generate about USD4.4 billion and would create
thousands of jobs.

To date, the DICT has common tower provider agreements with local firm ISOC Infrastructures Inc.,
Singapore’s ISON ECP Tower Pte. Ltd., IHS Towers, Edotco Group, RT Telecom Sdn Bhd of Malaysia, and
China Energy Engineering Corp.

The government will provide assistance to the tower firms through the facilitation of permits, right-of-
way, and other government support for infrastructure should they secure a contract with any of the
telco operators.

The DICT earlier said the Philippines needs an additional 50,000 cell towers to be competitive with its
neighboring countries in providing quality communication services to the public.

The country has about 16,000 cell sites, the lowest cell density in Asia.

The lack of cell towers has been identified as one of the barriers to affordable and consistently reliable
internet services in the country.

Nograles: Gov't will find ‘common ground’ on common tower policy for telcos
GMA News | January 26, 2019

Cabinet Secretary Karlo Nograles on January 26 assured the public that the government will eventually
find a "common ground" regarding its common tower policy, as the need to build more towers to
improve telco services arises.

"There may be differing perspectives regarding this issue, but the goal of the Administration remains the
same: to encourage the construction of more telecommunications towers so that telco services are
reliable and secure," Nograles said in a statement.

"The President and his alter-egos in the Cabinet are all working for the common good, and whatever
policy is eventually adopted will be guided by that precept," Nograles added.

The Cabinet secretary said that at present, the country’s two telcos have put up close to 20,000 towers,
which is less than half of the estimated 50,000 towers the country needs to provide consumers with
dependable telco services.

"The blind spots, dropped calls, missing text messages, and slow data speeds are a consequence of this
problem... Kahit gaano kaganda at high-tech ang inyong smartphones, hangga’t di natutugunan ang
pangangailangan na ito at di madagdagan ang mga towers natin, di mawawala ang problema na ito,"
Nograles said.

Officials recently expressed their differing views about the matter, with Presidential Adviser on
Economic Affairs and Information Technology Communications Ramon "RJ" Jacinto previously proposing
that only two tower companies be accredited to lease their facilities to telcos.

Department of Information and Communications Technology Acting Secretary Eliseo Rio, meanwhile,
proposed that up to five companies should be able to build towers.

Jacinto later modified his position, saying he was now open to have more than two tower companies
that could build common towers. However, he said a cap must still be imposed and existing telcos
should still be prohibited from building their own infrastructure.

Poe: Let courts rule on Mislatel franchise

Philippine Daily Inquirer | February 06, 2019

Sen. Grace Poe, chair of the Senate public services committee, endorsed to the plenary on Monday night
the approval of the transfer of the franchise of Mindanao Islamic Telephone Co. (Mislatel) to a
consortium owned by President Rodrigo Duterte’s close friend and campaign financier.

But Poe said the Senate’s approval of the transfer of Mislatel’s franchise to the consortium would not
bar anyone from questioning its legality in court.

“As regards the ‘red flags’ and ‘allegations of violations’ against Mislatel, interested parties are never
precluded to avail themselves of legal remedies in the regular courts,” she said.

While Mislatel "clearly" failed to comply with some conditions of its franchise, Sen. Grace Poe said "a
few colleagues" in the chamber agreed with the consortium's argument that only an act of Congress can
revoke the license.

"This is the cure now. Congress came up with that House concurrent resolution, it transferred it to the
Senate and now the Senate will vote on it, but we have certain amendments," Poe said.

Mislatel was declared the winning bidder to be the country’s third telco in November last year.

The consortium is a 60-40 venture between Dennis Uy’s Udenna Corp. and Chelsea Logistics Holdings,
and state-owned China Telecom.

Poe said it was now up to her fellow senators if they would find merit in Mislatel’s application for
transfer of franchise and vote for the adoption of the committee report.

“We are already near the finish line in this journey to have faster and better services in the telco
industry,” Poe said in a statement on Tuesday.

National interest

“It’s for national interest that I’m doing this,” Poe said.

She said the franchise remained valid unless there had been a congressional action on the matter.

“Congress has to act on it. And since no process of that took place, then their franchise is valid,” she
said.

Her endorsement of Mislatel as the country’s third telco came after Senate Minority Leader Franklin
Drilon challenged the validity of Mislatel’s franchise.

Void franchise

Drilon, a former justice secretary, said Mislatel’s original franchise was deemed void for not complying
with some conditions after its grant in 1998.

Among the conditions are its failure to start operations within a year from the approval of its permit by
the National Telecommunications Commission, to operate continuously for two years and to begin
operations within three years from the effectivity of the granting it a congressional franchise.
Drilon also contended that the transfer of the Mislatel franchise to the current majority owners in 2015
was void because it lacked congressional approval.

“Senator Drilon is correct when he says that there are certain requirements that we should comply with
if you are granted a franchise. One, it should be in operation one year after you received the franchise,”
Poe said in an interview.

She said clearly Mislatel did not comply with that requirement.

Under Republic Act No. 8627, the law which granted Mislatel’s franchise, legislators were allowed to
“alter, modify or repeal the franchise,” she said. (But they did not)

“Besides, Mislatel stands to lose more than P25 billion should they mess up with their commitments,”
Poe said, referring to the performance bond that Mislatel was required to pay to the government.

She said she was banking on Mislatel consortium to keep its word to provide 27 mbps of internet speed
to 37 percent of the population in the first year of operations.

Breaking duopoly

Poe said Mislatel’s entry would not only break the longtime duopoly of PLDT Inc. and Globe Telecom,
but also give the Philippines a chance to better its mobile phone service and internet speed, regarded as
one of the slowest in the world.

“Now, we are given the golden chance to possibly initiate a turnaround from being cellar-dwellers to a
rising star in terms of internet speed in the telco industry,” she said.

“An efficient, faster and better telephone and internet services will help improve every home and the
lives of family members who are far from one another,” she said.

Mislatel's committed service, coverage 'disappointing' — Expert

CNN Philippines | February 1, 2019

Mindanao Islamic Telephone Company (Mislatel) may have the technical capability to compete with the
existing telecommunication providers in the Philippines, but an expert believes that its commitments are
not enough to take the country to the forefront of the industry in Southeast Asia.

"From their track record they may perhaps have the technical capability, but the commitments that they
made were actually quite not high enough. Nakukulangan kami," Pierre Galla, a telecommunications
expert and co-founder of advocacy group Democracy.net said.

Mislatel is a consortium composed of Davao-based businessman Dennis Uy's Udenna Corporation and
Chelsea Logistics Holdings, partnered with the state-owned China Telecommunications, and the
Mindanao Islamic Telephone Corporation, Inc. It has vowed to provide an average internet speed of 27
Mbps to 37.03% of the Philippine population in its first year of operation. For its second to fifth years in
operation, the consortium committed to invest nearly ₱260 billion to cover 84.01 percent of the country
with an average internet speed of 55 Mbps.

Such commitments, according to Galla, are "fairly disappointing" despite the group's promise to shell
out hundreds of billions of pesos in upgrading its service and coverage in years after its maiden
operation.

"We will merely be at par with our neighbors at present. Maiiwan pa rin tayo," he said.

"The money is not the issue. When we were crafting highest committed level of service we were talking
about coverage and speed of as many Filipinos as much as possible," he added.

Galla, however, came to the group's defense against criticism that it won the bidding for the country's
third major telco player because of its ties with China.

He said Democracy.net "does not see preferential treatment at all" in the selection of Mislatel as the
third telco player.

"Our point of view would be which of the over 200 participants and several thousands of their affiliates
would have been brought together to create this preferential treatment... when in fact some of those
involved in the crafting of the ToR (terms of reference) are actually against the administration," he said.
Galla was among those who crafted the ToR for the selection.

Mislatel won the bidding in November last year after its rivals Philippine Telegraph and Telephone Corp.
and the SEARS Telecom Consortium of former Ilocos Sur Governor Luis "Chavit" Singson were declared
disqualified for different reasons.

It is still uncertain, however, if the consortium will be allowed to operate after the Senate public service
committee on Wednesday failed to reach a decision on issues regarding the validity of the group's
franchise.