House ICT Committee looks into prospect of a 3rd Telco Player

The House Committee on Information and Communications Technology, chaired by Rep. Victor A. Yap (2nd District, Tarlac), conducted a hearing last January 23, 2018 to discuss the management and administration of the country’s radio frequency spectrum and possible entry of a 3rd Telco Player. This comes after President Duterte ordered government agencies to ensure that the country’s third telecommunications provider should be in operation by March 2018.

In line with the President’s order, the DICT issued on January 8, 2018 the policy guidelines on the entry of a third telco player. The NTC is expected to come up with a circular on February that would show the terms of reference for the selection and the assignment of radio frequencies for the new major player in the Philippine telecommunications market.

On the other hand, Rep. Victor Yap filed House Resolution No. 1338 last September 26, 2017 calling for an investigation, in aid of legislation, on the spectrum management and administration by the NTC.

“Radio frequency spectrum is a scarce resource and considered the lifeblood of the telecommunications industry. NTC is the government agency mandated to regulate this precious resource. However, several issues have come up such as the alleged lack of bidding in the assignment of spectrum, the lack of transparency in NTC’s process, and the failure to maintain an effective competition among private entities in the use of communication and radio facilities,” Yap said.

Among the proposals being put forward in the committee is the enactment of a spectrum reform law that will equitably distribute the limited radio frequency spectrum allotted to the country. One hundred percent (100%) of GSM/2G frequency is already owned by Smart and Globe. Only 15 megahertz is unallocated in the 3G frequency while only 80 megahertz is available in 4G. This leaves the possible 3rd telco player with only 100 megahertz to start its operation.

“The recent call of the President involving the entry of 3rd telco player underscores the importance of pursuing the investigation into the management and administration of the country’s radio frequency spectrum. This would entail the assignment of the remaining available radio frequency spectrum and possibly the reassignment of those that are unutilized. Our objective to make policies, rules, and regulations on spectrum allocation effective will be rendered for naught if we allow the assignment of the remaining spectrum without closer scrutiny.” Yap said.

Chairman Yap highlights the importance of providing the 3rd Telco player with a fair battle ground to compete with the existing telcos and challenge their longstanding duopoly. He emphasized the need to protect the 3rd Telco player from being eaten by the existing telco giants if we hope to truly improve telco services to the people.

“The entry of a new player will not only provide competition to the existing telcos but will compel them to lower their costs and improve their services. However, we must help this telco and provide it with a breeding ground so as not to be devoured by Globe and Smart. As legislators, we must ensure that the new entrant will have a fair platform from which it can launch its business. That is why spectrum management is crucial if we are to make headway in the telecommunications industry,” Yap concluded.