US happy with Duterte appointments

Our sources in Washington DC told SpyBits that they are happy with several Cabinet appointments made by incoming president Rodrigo Duterte, in particular incoming Foreign Affairs Secretary Perfecto “Jun” Yasay (who is expected to visit the US Pacific Command in Honolulu this week) along with retired major general Delfin Lorenza for the Department of National Defense and former AFP chief Hermogenes Esperon as National Security Adviser.

According to our sources, the background of these appointees show that they have a greater understanding and appreciation of the dynamics that govern US-Philippine relations, and would know the critical importance of such agreements as the Enhanced Defense Cooperation Agreement in maintaining peace in the Asia Pacific region especially at this time.

Not many are aware that incoming Defense Secretary Lorenzana (PMA Class ’73) served as a military attaché at the Philippine Embassy in Washington and was appointed twice as Special Presidential Representative for Veterans Affairs/Head of the Office of Veterans Affairs of the Philippine Embassy in Washington – first in 2004 by then-president Gloria Arroyo and then in 2013 by President Aquino. A Philippine Legion of Honor Awardee, he also served as commander of the Special Operations Command  of the Philippine Army.

People of course are more familiar with former AFP chief Hermogenes Esperon (PMA Class ’74) who also served as Presidential Adviser on the Peace Process under Gloria Arroyo. Formerly the SEC Commissioner, incoming Foreign Secretary Jun Yasay is regarded as a “voice of reason” judging from his remarks that while bilateral talks could promote better relations with China, neither will the country distance itself from its longtime security ally which is no other than the United States – and that either way, the Philippines will not be a lackey to any foreign power.

Faster connectivity with PLDT-Globe acquisition of SMC telco

The acquisition of San Miguel Corp.’s Vega Telecom for almost P70 billion by telco rivals PLDT-Globe (in a 50-50 split) has raised a lot of questions over its impact to subscribers and the telecoms industry in general. Part of the acquisition deal is the awarding of several spectrum bands, the most important of which is the 700 megahertz (MHz) band which an industry insider says would enable both players to deliver faster and more reliable Internet connectivity all over the country.

PLDT and Globe are returning several frequency bands of the SMC telecoms to the National Telecommunications Commission which could be assigned – together with frequencies still held by the government – to a new telco player. In short, the deal has not shut out any opportunity for competition, the industry insider pointed out.

One of the reasons why the 700 MHz band has been much sought after is because it allows for wider coverage because low frequency radio signals travel much farther than high-frequency bands. With the 700 MHz band, bigger areas can be covered by operators with less cell sites needed, in effect allowing faster and less expensive deployment of Internet services – including wireless – through 4G/LTE in hard-to-reach areas. Additionally, 700 MHz signals have better indoor penetration and therefore give stronger signals inside buildings and offices.

The biggest beneficiaries would be those residing in rural areas since the lower band has wider range than the high-frequency bands, resulting in more ground covered at lesser cost and with lesser cell sites (which means less bombing targets for rebels), which could spur progress in the countryside. The two players will be able to serve a larger subscriber base considering that they already have large networks in place and will be able to integrate the added frequencies to their respective systems more quickly.

Prior to the deal, these frequencies have remained largely idle or unused for several years – but there is a large hidden cost attached to these unused frequencies because they prevent more opportunities for growth in terms of what is known as “digital dividends.”

While it’s understandable that the recent acquisition has fueled accusations of a duopoly in the telecoms industry, several observers also say that even without the entry of a third player, competition has already been stiff between PLDT and Globe, with both companies trying to outdo each other with promos and other services, including the progressive lowering of subscription and other Internet costs.

The fact is, both companies have been warned by the NTC to improve Internet speeds and broadband access within one year as part of the terms for the joint acquisition. The NTC has also required both Globe and PLDT to submit quarterly reports to monitor their progress, along with a rollout plan to be provided within two months showing which areas would be covered in the next three years to address the increasing demand for Internet access.

Following the deal, the two telco players have begun firing up cell sites utilizing the 700 MHz spectrum. Globe for its part will be rolling out 200 sites where the 700 MHz will be activated, starting in areas with high convergence of users like the National Capital Region. PLDT on the other hand put up its first 700 MHz base station in Tanay, followed by Ecoland in Matina, Davao City with an “unprecedented” Internet speed of 101 mbps.

For sure, residents of Davao City (and hopefully soon, other cities and municipalities) will be enjoying faster connectivity without necessarily having to pay an arm and a leg because the telcos will not have to put up new towers or cell sites since all they need would be additional radio equipment that can be installed in existing cell sites using the lower 700 MHz band. PLDT has also set aside an additional P43 billion install new facilities that would utilize the added frequencies to make Internet connectivity faster, more reliable and more affordable in the country.

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