Globe will hold on to frequencies regardless of PCC decision

Metro Manila (CNN Philippines) — Globe Telecom, Inc. will not have to return the spectrum frequencies it acquired from San Miguel Corp., even if the competition watchdog declares the deal null and void, company officials claimed.

The Philippine Competition Commission (PCC) only has authority to review business dealings, but the National Telecommunications Commission (NTC) has jurisdiction over the use of frequencies, Globe General Counsel Froilan Castelo said in a press briefing on Thursday.

Globe and PLDT, Inc. both bought San Miguel's telecommunications companies Bell Telecommunication Philippines, Inc., Liberty Telecoms Holdings, Inc., and Eastern Telecommunications Philippines, Inc.

These companies held rights over a range of frequencies, including the much-coveted 700-megahertz band that is seen as key to improve internet speeds in the country.

The PCC is contesting Globe and PLDT's acquisition, saying it was implemented before the regulator gave its approval.

But the NTC, Castelo pointed out, still approved Globe and PLDT's co-use agreement to start using San Miguel's frequencies.

"Our use of the frequencies is not linked to the PCC case. Even if we didn't acquire Bell Tel and the others, the co-use order will still happen," he said.

Globe Chief Technology Officer Gil Genio said, the NTC's approval to use the contested frequencies "speaks for itself."

In fact, he pointed out, the NTC even required Globe and PLDT to use the frequencies immediately, to improve internet speeds within the year, and to lay out a three-year plan to enhance networks.

"It is our responsibility to begin using those frequencies for the good of the customers, and that is what we've been doing," Genio said.

Globe and PLDT both maintain their buyout of San Miguel is valid. They are asking the Court of Appeals to stop the PCC from investigating the deal. The court is currently waiting for comments from concerned parties before issuing a decision.

Telco cliff

The telco giants are digging in their heels in this tug-of-war between them and the competition authority. The frequencies in question represent an important asset as the market shifts from calls and texts to mobile data.

Globe saw its revenues from traditional services drop by double-digits in the first half – down 16% for text messages and 11% for voice calls.

Mobile data, on the other hand, saw a 46% jump in revenues.

The Ayala-run telco hopes to capitalize on the digital shift, and its future plans focus on online content, apps, and mobile data promos.

But the 700-megahertz frequency is central to that. The band allows for farther geographical coverage and better penetration of indoor areas.

"Between the frequency bands, the 700-megahertz is important long-term because it allows us to cover a larger area using our current cell site footprint. You have to remember that we have constraints on adding sites," Genio said.

Globe has long bemoaned the long and tedious process of putting up a cell site in the country. It claims it needs to obtain 25 permits per site, and the approval period takes at least eight months.

Genio said this limits the company's ability to put up enough cell sites to expand the network. Globe puts up about 300-500 cell sites a year, but its backlog is estimated at 3,000 sites.