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PILIPINO
Telephone Corp. (Piltel) is allocating a total of P7.57
billion for capital expenditure (capex) to establish a
data communications network that promises to deliver
higher-quality voice and multimedia content.
Based on
its five-year rollout plan, the unit of cellular giant
Smart Communications Inc. said the projected capex for
the first year is P3.41 billion; P1.28 billion for year
2; P870 million for year 3; P1.01 billion for year 4;
and P1 billion for year 5.
The bulk
of the expenditure will be spent on the purchase of
customer premises equipment amounting to P2.91 billion.
Other equipment programmed for purchase include a base
transceiver station valued at P1.44 billion and a mobile
service switching center (P1.62 billion). The company is
also allotting P1.58 billion for other expenses such as
capitalized installation costs and transmission costs.
Piltel,
however, failed to disclose how it will finance the new
purchases.
The move
is in line with the company’s plan to construct,
install, operate and maintain a wireless data
communication service nationwide that will operate in
broadband wireless access (BWA) frequency spectrum.
Piltel’s
application for BWA frequency is still pending with the
National Telecommunications Commission (NTC). It,
however, assured the regulators that the company is
financially capable of maintaining the proposed network
and that the service is financially feasible.
“Data
networking penetration is on a healthy growth
trajectory, largely stimulated by broadband connection
between multiple computers and peripheral devices and
that the adoption rates for these types of services are
expected to increase. “The value of the proposition is
to provide customers the benefit to experience different
data services that suit their lifestyles,” said Piltel.
From
this new service, Piltel is projecting an annual
increase of about 800,000 in its subscriber base.
Piltel
will be using wireless broadband to deliver Internet,
specifically those in the rural areas. Public transport
groups, barangays, public markets and small cooperatives
are the hubs for this target market.
It also
proposes an information board service, a web-based
service linking the barangay officers and its
contingents via registration to an access code, instant
messaging and video for overseas Filipino workers and
their families, and Internet-connected info kiosks in
public areas.
“Talk N
Txt answers its market’s need to connect to family,
friends as well to the entire community without
compromising budget. The brand is currently an effective
tool in developing communities such as the barangay,”
said Piltel.
The
company expects to charge P1 to P10 for every minute of
call; P0.10 to P30 for every text message; P0.50 to P50
per multimedia service usage; P0.50 to P100 per content
for information on demand service; and P1 to P10 per
minute of video call.
Internet
browsing rates can either be charged P0.025 to P10 per
kilobyte or P0.05 to P0.75 per minute.
Piltel’s
application, however, is being opposed by Multi-media
Telephony Inc. (MTI), the operating company of Broadband
Philippines.
MTI,
also a provider of data services, is blocking Piltel’s
application on claims that its entry will result in
“ruinous competition.”
“The
grant of an authorization to another carrier to provide
basically the same service will strain the financial
viability of the carriers now presently providing
similar services. Moreover, there is no immediate public
need that this application would address as the limited
market is fully covered by the existing operators with
plenty to spare,” MTI had said.
But
Piltel cited a Supreme Court order which states that a
reduction in earnings is not sufficient to prove ruinous
competition.
According to the High Tribunal’s order cited by Piltel,
“ruinous competition exists when the opponent would be
deprived of fair profits on the capital invested in its
business. It must be shown that the business would not
have sufficient gains to pay a fair rate of interest on
its capital investment.” |
