Digitel to launch mobile phone service before yearend

Gokongwei-owned Digital Telecommunications Inc. (Digitel) is commercially launching its cellular mobile service before the end of the year, despite the absence of an interconnection agreement with industry leaders Globe Telecom and Smart Communications.

Without the interconnection agreements in place, Digitel mobile customers will not be able to call those being serviced by other service providers like Smart and Globe and vice-versa. A separate agreement is needed for text messaging.

"But we are in the process of negotiating with these companies to have the interconnection in place. We hope we can have an agreement soon," Digitel president and chief executive officer Lance Gokongwei told The STAR. Gokongwei is also the president of JG Summit, the holding company of the Gokongwei group.

Negotiations, which officially started a month ago, are still ongoing between Digitel and Globe for an interconnection agreement, which is mandated under Republic Act No. 7925 and Executive Order No. 59. Sources said that while both parties are negotiating in good faith, there are still many issues that need to ironed out, including pricing, technical and legal aspects.

In the case of Smart, interconnection with Digitel may take a longer time, especially after the former filed a case with the National Telecommunications Commission (NTC) asking the government agency to cancel Digitel’s CMTS license. Digitel earlier branded the filing by Smart as a dilatory tactic to prevent the interconnection.

Digitel will be the fifth company to enter the highly competitive mobile telephone service business, whose players currently include Ayala-owned Globe and subsidiary Isla Communications (Islacom), PLDT-owned Smart Communications and PLDT-affiliate Pilipino Telephone Inc. (Piltel) all of which provide digital service and Extelcom which is still using the analog technology.

The Supreme Court has lifted any legal obstacle as to Lopez-owned Bayan Telecommunications’ (BayanTel) use of its provisional authority to engage in the cellular business, but officials said they are still studying this option.

Gokongwei said in an interview that they have so far distributed around 2,000 mobile phones among the group’s employees for testing, even as he added that the commercial launch is scheduled before the end of the year.

Digitel’s entry into the cellular mobile telephone system (CMTS) business will cost $180 million by the end of the first phase which targets the installation of 681 cellsites all over the country. The implementation of the first phase was awarded to Alcatel.

Gokongwei, who is a board member of Digitel, said that the CMTS project will be implemented in two phases, but no cost can yet be attributed to the second phase since it has yet to be awarded.

Digitel expects to have in place around 1,000 cellsites before the end of 2003. According to Gokongwei, they will have 400 cellsites when they launch before yearend.

Officials said Digitel’s system will utilize the global system for mobile communications (GSM) technology, but the system is also prepared to go into the next generation of 2.5G technology known as the general packet radio service (GPRS) already being offered by Globe and Smart.

Digitel is the country’s second largest landline telephone company next to PLDT and officials earlier disclosed that they might bundle its landline offerings with its cellular services.