On frequency allocation
(The Philippine Star) - February 27, 2016 - 9:00am

Two experts have joined the growing clamor for the National Telecommunications Commission (NTC) for government to do its part by investing in the necessary infrastructure to improve Internet speed in this country and by reallocating the 700 megahertz telecom frequency.

The 700 MHz frequency is currently mostly held by Liberty Telecom, a wholly owned subsidiary of the San Miguel Corp. group.

Rodolfo “Jun” Lozada, whistleblower of the famed NBN-ZTE scam, compared the Internet “superhighway” to a limited roadway, sharing only a single gateway into the World Wide Web.

He said a third player such as SMC, even in partnership with the Australian telco giant Telstra, would not solve the problem of Internet speed in the country, adding that what the country needs is an NBN or national broadband network.

In an earlier article by Rappler, Lozada was quoted as saying “we do not have an NBN in the Philippines which is likened to roads used to move people and goods around.”

Lozada has also said these roads were primarily built by government for public transport use. But with the country in the cusp of the digital era where digital products and services are traded globally, he emphasized in an interview with another newspaper that what is needed is a transport infrastructure to move these digital goods.

San Miguel originally partnered with foreign telecommunication firm, Qatar Telecom (QTel), and Liberty Telecom, the holding company for Wi-Tribe and Skyphone Logistics. SMC subsequently bought out its Qatari partner July of last year. 

Now, SMC plans to partner with Telstra to build a 4G network in the Philippines, with the latter owning a 40 percent stake.

Meanwhile, lawyer Rolex Sulpico appealed to the government to investigate the Telstra-SMC deal, warning the joint venture may eventually use the allegedly anomalous ZTE to build its broadband network in the Philippines.

Sulpico also supports a review of frequency allocation as well as a possible need for congressional approval on Telstra’s entry.

He said government should do its part and invest in the needed infrastructure and asked regulators to look for other solutions to improve Internet speed.

Both Lozada and Sulpico have emphasized that fast broadband service would always be good for the Filipinos and would create more jobs.

Both Globe Telecom and the Philippine Long Distance Telephone Company (PLDT) have asked the NTC for the equitable allotment of the 700 MHz spectrum to all telco players, saying it is necessary for faster Internet services in the country and to bring speeds closer to that enjoyed in other countries in the region.

The 700 MHz spectrum, which can easily penetrate buildings and walls and provide greater coverage, will allow telco firms to deploy infrastructure with lower investments required compared to other frequencies.

Globe’s legal counsel Froilan Castelo has said consumers would reap the benefits if active firms are given access to the unused 700 MHz spectrum.

He pointed out that harmonizing the 700 MHz spectrum would allow the industry to provide broadband and data services at faster speeds and in a more cost-efficient manner, and this would ultimately redound to increased benefits for the consumers.

For his part, PLDT regulatory affairs and policy head Ray Espinosa stressed the 700 MHz spectrum is “imbued with public interest because all over the world, this scarce frequency has been reclassified for mobile telecommunication use from broadcast use.”

PLDT has even threatened legal action and to elevate the matter to President Aquino should NTC fail to act on its request.

According to GSMA, a group of mobile operators and related companies, the Philippines is one of only two countries in the Asia-Pacific with major issues preventing their allocation of the 700 MHz band to mobile broadband technologies.

GSMA said that except for the Philippines and Thailand, all other countries in the region have either adopted the APT Band Plan or have progressed towards its adoption. Countries in Europe, the US and other developed nations have progressively rolled out their strategies using the 700 MHz.

The group is urging countries to harmonize their frequencies to take advantage of significant socio-economic benefits of allocating the 700 MHz band to mobile. These benefits include growth in gross domestic product (GDP), employment, entrepreneurship, and tax revenues.

According to GSMA’s estimates, the digital dividend for the Asia-Pacific region could be worth almost $1 trillion in additional GDP by 2020.

The group said delaying the decision to allocate the 700 MHz band could lead to loss of employment opportunities and tax revenues for the government as well as loss of new business activities.

The local telecom industry has also received support from the United Nations as the organization’s information and communication agency revived its call to utilize the contested 700 MHz frequency.

Growing middle class

According to Eden Stratey Institute, the global Emerging Middle Class (EMC) population is expected to grow from 565 million today to 3.5 billion in 2030, 85 percent of which will be coming from Asia.

And with a rapidly growing market of consumers joining the ranks of the middle-income group, more Filipinos are expected to afford a more convenient lifestyle.

In the Philippines, the number of middle class households is set to grow by 41.8 percent between 2015 and 2030, reaching 8.4 million by 2030. Furthermore, this market is eyed to enjoy an enhanced capacity for discretionary spending since the average disposable income is set to reach $11,429 or about P600,000 in 2030. This represents a 70-percent increase compared with the median disposable income in 2014.

Zinnia Rivera, general manager of Red Ribbon, said all these suggest the future looks bright for the country’s EMC market and that spending power of consumers is now increasing.

Now that a rapidly growing market of consumers is hopping on the EMC boat, more Filipinos are able to buy goods or services that go beyond their needs.

And with over 300 stores nationwide, Red Ribbon, one of the country’s leading bakeshop chain, hopes to keep up with this trend through innovation.

Rivera said innovation is important in competing in the cakes and pastry industry, but this must be coupled with consumer and market insight.

She said they have to make sure that their innovations resonate with customers. Thus, Red Ribbon always stays in touch with market wants, introducing refreshing flavors that match their occasion.

Rivera added that since the market always keeps on changing, it is important to stay ahead and ensure their products are up to par with the changing market landscape.

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