Gov’t may compel cellphone firms to bid for new airwaves

Congress should pass new legislation to compel the National Telecommunications Commission (NTC) to sell to the highest bidder all new allocations of airwaves that cellular telephone operators need in order for them to meet the growing demands of their subscribers.

According to Catanduanes Rep. Joseph Santiago, government could easily generate hundreds of millions, possibly even billions of pesos in additional revenue from the open and competitive bidding for frequencies required by telecommunications companies for their 3G or third generation wireless systems.

"The public, through the State, owns the airwaves. It is thus only fair and reasonable that taxpayers should benefit from the lucrative commercial use of frequencies by cellular telephone operators," Santiago pointed out.

"Congress should now mandate that each new allocation of frequencies be sold to the cellular telephone operator that offers the best bid," he added.

At present, the NTC merely collects a fixed yearly spectrum user’s fee from cellular telephone operators that seek new frequency allotments.

Santiago said the auction of new frequency allocations "might even be more productive" than the proposed "windfall tax" on the telecommunications industry.

President Arroyo, in her State of the Nation Address, urged Congress to pass a number of new tax bills to help government achieve a balanced budget. The measures include a proposed "windfall tax" on the telecommunications industry, which has been raking in huge profits from the mobile telephone boom.

Last week, the NTC revealed that it is set to draw up the guidelines that would govern the allocation of 3G frequencies needed by cellular telephone operators to ensure more efficient voice and data transmissions.

In 3G wireless systems, mobile telephone and Internet users can access information and transfer large data faster and easier. Right now, telecommunications companies use the 2G or second generation (global system for mobile communications or GSM which enables text messaging) and 2.5 G (general packet radio system or GPRS which allows for multi-media services).

NTC commissioner Ronald Solis earlier said they are gathering information from here and abroad as to the appropriate policy environment for 3G.

It will be recalled that when their respective governments decided to charge them huge license fees for 3G, many European telecommunications companies incurred heavy losses and even went under.

Solis said this has to be taken into consideration in order not to make 3G a huge burden on telcos.

Right now, there are at least two or three applications for 3G licenses with the NTC filed by telcos that are not yet operational but have congressional franchises. The country’s mobile phone service operators namely Smart Communications and Globe Telecom have said they will avail of the 3G licenses if made available by the NTC although they are not yet too keen on the technology since they have yet to fully utilize the 2.5G investments.

The country’s cellular industry is still powered by basic text messaging while multi-media applications still remain underutilized.