Low usage may hinder 3G roll out in the Philippines

MANILA – Everyone craved for it in the past. But now local telecommunication firms in the Philippines who reapplied for a 3G license might not even roll out the technology once the permit is granted because of the low turnout of users.

Jorge Sarmiento, deputy chief of the National Telecommunications Commission (NTC), told Computerworld Philippines the NTC would soon resolve the appeal of the four telecommunication companies who reapplied for a 3G license two years ago, but expressed doubts if the license awardee will actually use the permit.

“We will resolve, in about two months time, the appeals of the other telcos aspiring for 3G license–either dismiss [their appeal] or give them due course,” Sarmiento said. “However, should the remaining [frequency] slot is assigned to one of the four applicants, I doubt if they would use it because of the low take-up of 3G here.”

The four telcos–Media Telephony, Bayan Telecommunications Inc., AC Communications Inc., and Pacific Wireless Inc.–in 2005 received a failed rating by the NTC, which was then under the leadership of former NTC commissioner Roland Olivar Solis. The telcos reapplied for the permit in 2006 hoping to win the last out of five frequency slots available.

Sarmiento said that out of the four telcos who were granted a 3G license, only two of them rolled out the technology: Smart Communications Inc., and Globe Telecommunications Inc. The other two, Digital Telecommunications Phils. Inc. (Digitel) and Connectivity Unlimited Resources Enterprise, Inc. (CURE) did not implement 3G.

“Way back then, everyone thought the business (3G services) to be good but it wasn’t,” Sarmiento said. “And so I doubt if the 5th (licensee) would roll it out. I just doubt, because the test here is the business take up.”

Sarmiento added they have no plans to entertain the requests contained in two House of Representatives resolutions requesting the commission to nullify the 3G licenses it granted to the four telcos, alleging that NTC broke the law when it awarded the licenses without going through the normal bidding process.

He claims NTC’s distribution of four of the five frequency slots to 3G-licensed telcos is also based on present laws and that when the two House resolutions came, the 3G licenses were already awarded and, in fact, two of them–Smart and Globe–had already rolled out the technology.

“Theirs [congressmen] is just a resolution. If we nullify the licenses based on their recommendations, the telcos that rolled out would react, either file a case against us or go to court to stop it; and so it is difficult to [nullify the licenses],” Sarmiento said.

According to NTC statistics, there are now 57,344,815 mobile phone users in the Philippines but declined to give figures on the number of 3G users. Sarmiento, however, said the high prices of 3G handsets in the country could be one of the main reasons behind the technology’s slow take up.

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