NTC grants Globe, Smart permanent licenses to operate

The National Telecommunications Commission (NTC) finally granted Globe Telecom and Smart Communications yesterday the much-awaited ‘permanent’ license to operate their respective businesses for the next 25 years.

The certificates of public convenience and necessity (CPCN) were given for Globe’s cellular mobile telephone service (CMTS), local exchange telephone service (LEC), and international gateway facilities (IGF) as well as to subsidiary Isla Communications mobile telephone business and landline telephone service. Islacom received the CPCN for its IGF much earlier.

Also granted were the CPCN for Smart’s mobile telephone operations as well as for its IGF in Metro Manila, integrated LEC, domestic toll service, and private line service.

A CPCN is only given once a private telecommunications company has successfully proven its legal, financial and technical capabilities in providing various telecom services to the public.

Prior to the granting of the CPCN to Globe and Smart, both were operating using provisional authorities (PAs) that had to be renewed every 18 months, and, recently, every three years.

In an interview, Globe senior vice-president for corporate and regulatory affairs Rudy Salalima said the grant of the CPCN by NTC will deliver a good signal to investors and to financiers "since we are no longer relying on a mere PA."

Globe’s PA for its cellular business was first granted in 1993 while the service was launched in 1994-1995.

Smart legal affairs head Rogelio Quevedo likewise pointed out that while a PA is no disincentive to do business, the grant of a CPCN is better for the company since investors and financiers look for a more long-term authorization from government.

The certificate was granted to Smart after it fully complied with the requirements set by the NTC under Executive Order No. 109 which requires an authorized CMTS operator to provide at least 400,000 local exchange lines and an authorized IGF operator, 300,000 local exchange lines.

In accordance with the rollout plan approved by the commission, Smart operated and maintained an integrated LEC telephone service, domestic toll service and private lines service, public payphone facilities and public calling offices (PCOs) in Abra, Benguet, Ilocos Norte, Ilocos Sur, La Union, Mt. Province, Pangasinan, Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, Zambales, and in the National Capital Region, Las Piñas, Muntinlupa, Parañaque, Pasay, Pateros, and Taguig.

In support of its nationwide CMTS, Smart said it exceeded the 80 percent minimum requirement for coverage of all provincial capitals, including all chartered cities within a period of seven years. In a report submitted to NTC last June, Smart pointed out that it already installed LEC lines more than what is required or provincial capital coverage at 92 percent compliance. As of March 31, the company had nearly seven million subscribers.

In the case of both Globe and Islacom, the two Ayala-owned companies also exceeded the government’s 80 percent minimum requirement for CMTS coverage of all provincial capitals including all chartered cities. The two had a combined CMTS subscriber base of about five million as of the first quarter of 2002.

The CPCN, which is renewable after 25 years, replaces the PAs being used by Globe and Islacom to operate their mobile and fixed line networks. Two years ago, the NTC also granted Globe a CPCN to provide an IGF.

Under the NTC service area scheme, Globe is allowed to operate and maintain an integrated local exchange telephone service, domestic toll service and private lines service, public payphone facilities and public calling offices (PCOs) in Makati, Mandaluyong, San Juan, Pasig and Marikina in the National Capital Region; Cavite, Batangas, Mindoro Occidental, Mindoro Oriental and Palawan in South Luzon; as well as Lanao del Norte, Lanao del Sur, Maguindanao, Sultan Kudarat and North Cotabato in Mindanao.

Islacom, on the other hand, which was incorporated on June 15, 1990, has the whole Visayas region as its service area.

Globe and Islacom had over 200,000 landline subscribers as of the first quarter.

Since 1993 when Globe engaged in the telephone business, it has emerged as the leading alternative telecommunications provider in the Philippines today. It continues to enjoy strong shareholder support from Ayala Corp., Singapore Telecom International, and Deutsche Telekom that had led to a steady equity stream as well as unwavering investors’ confidence over the years.

From being a pure data service provider, Globe has evolved into a full-service telecommunications company. It offers CMTS, fixed telephone and international communications services, international private leased (IPL) lines, Internet access, VSAT (Very Small Aperture Terminal) service, inter-exchange carrier service, frame relay, value-added network services (VANS) and other domestic data communications services.