BayanTel cellphone service starts next yr

The Lopez-owned Bayan Telecommunications Inc. (BayanTel) is expected to start its cellular phone operations early next year despite strong opposition from existing providers which fear that the move will result in stiffer competition.

Edgardo Cabarios, head of the National Telecommunications Commission (NTC) common carriers accreditation division, said yesterday that normally one year is enough for new players to put up the necessary infrastructure estimated to cost about P6 billion.

After seven years, the commission finally approved BayanTel's application for a provisional authority (PA) which will allow it to offer wireless services, but the latter has yet to receive a copy of the decision.

Alvin Blanco, NTC radio frequency division chief, said BayanTel has applied for 10 Megahertz (Mhz) in the spectrum allocated for those planning to use global system for mobile communications (GSM) digital technology.

However, he said the commission usually grants only 7.5 Mhz since radio frequency is a very scarce resource which should be properly regulated although additional frequency may be given if the need arises.

The NTC has already reallocated 20 Mhz radio frequency bands such as the 1745-1750 Mhz/ 1840-1845 Mhz; 1750-1755 Mhz/ 1845-1850 Mhz; 1765-1770 Mhz/1860-1865 Mhz; and 1770-1775 Mhz/1865-1870 Mhz as it opens the door to new mobile operators.

If BayanTel is given 7.5 Mhz and Smart Communications Inc. is granted is request for an additional five Mhz, there will be only one more room left for another operator which is likely to be the Gokongwei-owned Digital Telecommunications Philippines Inc. which also has a pending application at the NTC.

In memorandum circular 9-3-2000, the NTC said telephone companies which have successfully installed the required number of landlines in their respective service areas, could apply for a license to operate a cellular phone network.

The NTC pointed out that the move is one way to ensure delivery of the much-needed phone lines in the unserved areas of the country as well as help the carriers recover from the rapidly declining international toll revenues.

BayanTel and Digitel were both able to finish their commitment to put up at least 300,000 landlines ahead of the three-year period given by government.

The NTC noted that since only 52 percent of the total number of cities and municipalities are provided with local telephone service, there is still a pressing need to encourage the players to go to far-flung provinces and lay down the lines and giving them the cellular license in exchange for more phone lines is one way of doing so.

Cellular phone companies are required to install at least 400,000 telephone lines in exchange for the PA.

While in the past, there were five CMTS operators, there are now effectively, three left as Smart merges its operations with Pilipino Telephone Corp. (Piltel) and Globe Telecom does the same with Isla Communications Co. (Islacom).

Only Express Telecom does not have any partner yet but with BayanTel joining the industry, it is likely that the former could use the latter's GSM network to improve its services.

BayanTel has a 46.6-percent stake in Express Telecom which it blamed for the estimated P6-billion losses it incurred during the past three years.

Once the dominant mobile phone company in the country, Express Telecom has almost gone to oblivion with barely 200,000 subscribers since BayanTel was not allowed to participate in managing the ailing firm.

Cabarios said that if Millicom Asia, the strategic partner of BayanTel in Express Telecom allows it, the latter could use BayanTel's GSM network similar to the partnership between Piltel and Smart.

Express Telecom is currently using the analog system which has a dwindling subscriber base due to its inability to offer value added services, particularly text messaging.