World-class service

Reactions are mixed insofar as recent developments unfolding in the local telecommunications industry are concerned.

Just recently, the Mislatel consortium of Davao-based businessman Dennis Uy and state-owned China Telecom Corp. was declared as the provisional third telco player in the Philippines, after submitting the only compliant bid.

Many things can still happen though, between the time the contract is finally awarded and the time this third telco starts operations.

PLDT chief corporate services officer Ray Espinosa has said that it may take two to three more years for the third telco to build its committed network coverage.

In the meantime, the country’s two leading telco operators are doing everything within their means in terms of improving their coverage and service. So by the time Mislatel comes in, it may have to work double time just to catch up.

One reason to rejoice though is a recent report from independent mobile analytics company OpenSignal which said that Smart Telecommunications’ service is now comparable to that of US carriers.

The recent State of Mobile Video report revealed that Smart gathered a score of 42.2, compared to the Philippines’ overall score of 34.98.

Smart’s score is even better than AT&T’s 40.88 and Sprint’s 41.1.

This is good news since a previous report from the same research firm revealed that the Philippines has the third slowest overall download speed out of 69 nations.

PLDT president and CEO Manuel Pangilinan said the OpenSignal report validates not only Smart’s strategy, but the work put in by the entire company to build its network, pointing out that the company has always been aware of Filipinos’ love for video content.

A recent research report by content delivery firm Limelight Networks has noted that Filipinos are among the world’s most avid video consumers. It said viewers in the Philippines watch the most online videos each week at eight hours and 46 minutes, even more than India and the US, where people watched close to 8.5 hours of online video.

Singapore got the highest score with 66.9, followed by Australia with 64.9, Taiwan with 64.7, and South Korea with 62.8. The Philippines is at the bottom with a video experience score of just 35.

While Smart got 42.21 points, rival Globe Telecom made only 29.22 points.

OpenSignal predicts that the deployment of 5G technology will play a big part in the advancement of mobile video viewing experience, saying there’s no question that 4G revolutionized mobile video, but in order for mobile video to reach its full potential, we may need to wait for 5G.

Last June, Smart in partnership with Huawei Technologies Phils. Inc. reached 5G speed of over 14Gbps during a test in the PLDT-Smart 5G Technolab. Smart said that it will deploy 5G in the Philippines by the first half of 2019.

PLDT, subsidiary Smart, and Clark Development Corp. (CDC) have also signed a memorandum of understanding to launch Clark Freeport Zone (CFZ) as the country’s first Smart 5G City. Under the MoU, PLDT and Smart, together with technology partner Ericsson, will fire up the first 5G cell site in the city in November.

According to Smart, with its capability to deliver extremely high speeds coupled with low latency, 5G opens up exciting possibilities for Internet of Things (IoT) applications for Filipinos, as well as smart applications for the transport sector, traffic management, manufacturing, airport and mall operations, logistics and warehousing, retail, customer support and smart homes, among others.

Under its current network upgrade program, Smart is installing 5G-compatible radio equipment across its network, which now has over 2,000 5G-ready sites.

PLDT has committed historic levels of resources for network transformation. For 2018, PLDT capex is expected to reach P58 billion, which includes allocations for the aggressive roll-out of its fiber broadband service, which also supports the stepped-up deployment of the mobile network by providing high-capacity links for cellular base stations.

Bad decisions

The end seems to be nearing for utility firm Panay Electric Co. (PECO), which for 95 years has been the sole electricity distributor in Iloilo City.

House Bill 6023, which seeks to renew PECO’s franchise, is still pending with the House committee on legislative franchises. PECO’s franchise will expire next year.

Meanwhile, House Bill 8132 granting a congressional franchise to More Minerals Corp. over the same franchise area has already been approved by the Lower House. Senator Grace Poe, who chairs the Senate committee on public services, has earlier said that PECO’s franchise may not be renewed in the Senate, as she cited mounting complaints regarding PECO’s poor service.

PECO was put up in 1923 by prominent Iloilo businessmen who four years later sold the business to the matriarch of the Cacho clan, Dona Candelaria Soriano Cacho. Lola Candi, as she was known, gave management of the utility firm to her son Mariano, a civil engineer. Management has remained in the hands of the Cachos since then.

Because PECO was a monopoly, there was no incentive to improve its service, Iloilo City residents note, adding that the utility seems to have survived due to its political connections.

For many years, they said that PECO refused to invest in modernizing its distribution facilities, resulting in undersized and crowded feeders, leaning poles, disorganized service drops, unsafe clearances of lines and substations from vegetation and structures, and leaking substations and transformers. Its distribution charges appear to be low because it has not submitted any capital expenditure program to the Energy Regulatory Commission (ERC) to modernize its facilities, they added.

PECO’s critics also said that the company has chosen to instead continuously declare dividends to its stockholders despite complaints of overbilling and bad service from Iloilo residents. First Philippine Holdings (FPH) disclosed to the Philippine Stock Exchange that PECO declared dividends amounting to P41 million in 2015, P43 million in 2016 and P51 million for its 30 percent shareholdings in the Iloilo utility firm. By extrapolation, the Cacho family which owns the remaining 70 percent of PECO, would have received P95.67 million, P100 million and P119 million for the same years, as dividends from PECO.

Instead of plowing back money to improve its facilities, PECO also chose to build a new P65-million head office building with a private elevator and accommodations for its senior executives, they revealed.

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