NATIONAL Telecommunications Commission (NTC) Deputy Commissioner Edgardo V. Cabarios conceded that the No. 1 problem that the whole telco industry faces—which causes the slow Internet speed—is the lack of adequate infrastructure, both soft and hard.
When addressed, this could help micro, small and medium enterprises (MSMEs) grow and compete within and outside the Asean, and help hasten the expansion of the local output.
“If you want to be globally competitive, MSMEs have to have Internet access, which is a tool to trade,” he told the BusinessMirror in an interview. “So, we have to lower the costs, so they can be globally competitive. You have to provide that infrastructure.”
Telco infrastructure is divided into two: passive and active. The first one pertains to hard facilities, such as towers, cell sites and cable systems. Active infrastructure, on the other hand, pertains to spectrum.
“In other countries, infrastructure sharing is mandatory—specifically, passive infrastructure, which are towers, buildings, housing and equipment,” Cabarios said. “In the Philippines, it is not mandated, but is only encouraged. However, despite being encouraged, competitors will never give each other access to their passive infrastructure.”
As smartphones continue to evolve into all-encompassing wireless personal computers, telecommunication operators need to construct additional cell sites to enable their respective networks to transmit enormous amount of data.
Cell sites transmit radio-frequency signals, which enable voice and data services in a given geographic area, simultaneously supporting multiple handsets, operating in different frequencies and maintaining customer connectivity even while they are in transit.
Based on a study made by TowerXchange, an independent community for operators, tower companies, investors and suppliers interested in emerging-market telecom towers, the Philippines lags behind its neighbors in Asia when it comes to cell sites built.
The number of unique physical cell sites in the Philippines is one of the lowest in Asia with a combined 15,000 cell sites. China has the highest number, with 1.18 million cell sites; followed by India, with 450,000; Indonesia, with 76,477 cell sites; Vietnam, 55,000; Thailand, 52,483; Pakistan, 28,000; Bangladesh, 27,000; and Malaysia, 22,000.
The Philippines is only higher than Cambodia and Australia, both with 9,000, Myanmar with 7,620 and Sri Lanka with 7,000. To compare, the United States has a total of 205,000 cell towers in place.
“The problem is, since it is not mandatory, we can’t force telcos to share their infrastructure with one another—that would require a law,” Cabarios said. “If we want to reduce costs of telecom services, then we need a law.”
He added that should lawmakers deem it useful, the law should include the specific details as to the cost. “We need a law that will set all the conditions, including costings. If there is law, then telcos have to abide by it,” Cabarios said.
According to a joint study on broadband policy conducted by the United States Agency for International Development and the Foreign Chambers of Commerce, tower sharing could be a solution to increase broadband speed and make it more affordable.
Since this could help in improving their services, the two largest telecommunications companies in the Philippines are open to the idea of sharing infrastructure.
“Tower sharing makes sense, in particular, if you are going to build a new network. If you have an existing network, there is very little benefit because the towers are there already, so if you share, it is not really of big benefit,” Joachim Horn, the chief technology and information advisor at Smart Communications Inc., told the BusinessMirror in an interview.
He added: “But, we are open to any kind of discussion as long as it is on level playing field, not one operator gets an undue advantage compared to the other.”
Globe Telecom Inc. Spokesman Yolanda C. Crisanto agreed, but said new players should also do their share in building infrastructure.
“We’re open to this concept. But if we do that, some other player will also have to put in their share of the infrastructure. You cannot enter the industry and you wouldn’t build,” she told the BusinessMirror via phone. Crisanto was referring to the soon-to-be-launched telecommunications company of San Miguel Corp.
“There has to be a middle ground where everybody gets to win,” Crisanto said. “San Miguel declared that they want to be a telco player, so let them do their share of the build. Tower sharing is not an issue, but there has to be equitable amount of investments from all players.”
Building a single cell site ranges from P5 million to P8 million.
But for Horn, tower sharing could prove to be difficult, given the current telco environment.
“Sharing very much depends on the environment, and it is a political, regulatory question that requires the right prerequisites,” he said. “You have to make sure that sharing is not only to give one party undue advantage.”
Horn added that the practice of sharing infrastructure “only works under certain circumstances…which, I don’t think we have here in the Philippines. It depends on the state of rollout. If the operators have already built cell sites, there is not much benefit from sharing. The regulatory environment in terms of who pays what and these agreements need to be there.”
Horn added that the towers of Smart are designed to accommodate a single operator.
“This is not a low hanging fruit. It sometimes sounds so easy, but I have done this in different countries in different circumstances; sometimes it works, sometimes it doesn’t,” said Horn, who used to work for various foreign telcos.