GMA signs Digitel franchise

President Arroyo has approved a 25-year franchise application of Gokongwei-owned Digital Telecommunications Inc. (Digitel) to operate a cellular phone firm.

To be operated by Digitel Mobile Philippines Inc., which was spun off from Digitel, the newly signed franchise application would allow the telecommunication firm under RA 9180 to "construct, install, establish, operate and maintain telecommunications system throughout the country."

Digitel will be the fifth company to enter the highly competitive mobile phone telephone service, 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.

Digitel’s entry into the cellular mobile telephone system (CMTS) 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.

The CMTS will be implemented in two phases, but no cost can yet be attributed to the second phase since it has yet to be awarded.

Earlier, Digitel president and chief executive officer Lance Gokongwei said Digitel will commercially launch its cellular phone service before the end of the year despite the absence of an interconnection agreement with industry leaders Globe Telecom and Smart Communication.

Without the interconnection agreements in place, Digitel mobile customers will not able to call those being serviced by other service providers like Smart and Globe and vice-versa.