Globe ready to spend billions to upgrade to 3G technology

Globe Telecom will spend billions of pesos to upgrade its platform to third-generation mobile communications technology (3G) as soon as government comes out with a policy on the distribution of frequency.

Globe president and chief executive officer Gerardo Ablaza said the company is just waiting for the National Telecommunications Commission (NTC) to decide on the matter, after which the company would use its financial resources to upgrade its infrastructure and acquire 3G-ready handsets.

"We’re trying to be prepared with what the NTC would come up on the 3G issue. They said the rules would be ready by the second half of the year. We’re an important player in this market. If 3G is ready, we’ll be an important player in this segment," he said.

Ablaza added that Globe’s free cash position is strong, which it can use that to upgrade from the currently used global systems for mobile communications (GSM) or 2G, general packet radio system (GPRS) or 2.5G and EDGE or 2.75 G.

3G involves a broadband, packet-based transmission of text, digitized voice, video, and multimedia at data rates up to two megabits per second, said to be the next phase of evolution in mobile phone telephony.

Ablaza himself earlier said it would not make sense to deploy 3G-enabled handsets at this point when the current infrastructure make-up of operators still need tweaking to support the new platform, as well as the current preference of majority of mobile subscribers.

"The third-generation wave would be more meaningful if introduced between 2008 to 2010 here," he said.

For his part, Philippine Long Distance Telepone Co. and Smart Communications chairman Manuel Pangilinan said the market is not yet ready for 3G as the operators are still on 2.5G technology, although the PLDT group is likewise preparing for such upgrade.

GPRS, which offers data speeds at 56 up to 114 kilobits per second, is a packet-based wireless communication service that provides data rates and continuous connection to the Internet for mobile phone users and allow them to take part in video conferences and interact with multimedia web sites and similar applications using mobile handheld devices. It is based on the GSM platform and is seen as an "evolutionary step" toward Enhanced Data GSM Environment or EDGE (also referred to as 2.75G) and 3G.

"The cost of putting up a 3G network is quite formidable because it is entirely a new network. The cost is similar to 2.5G and the capacity it offers is just twice so why spend for scarce resources for something the market does not need yet. We are looking at four to five years from now before the market could be ready," Pangilinan said.

Local operators have asked the NTC to postpone selling 3G licenses to prospective operators until the market is deemed ready for the new technology.

The commission has yet to determine whether to bid out or allocate the 3G frequencies this year at prices of as high as P450 million as the minimum bid price or upfront payment per band, on top of a spectrum user’s fee of P100 million for each band.