Smart president and CEO Napoleon Nazareno earlier said the company will spend about $60 million to upgrade its system and offer 3G services. The investment will be spread out over the next two years. Part of the amount to be spent on 3G infrastructure is in the capital investment of P18 to P20 billion that PLDT had earmarked for 2006.
It is estimated that the company will invest a total of $300 million to roll out its 3G mobile services in the Philippines. "To cover the major cities and municipalities in the country, the estimated investments will be around $300 million," said Rolando Peña, Smart head for network services division. Going into 3G is cheaper for incumbent mobile players with strong digital wireless networks, as they need only to upgrade the existing system.
3G wireless communications technology allows transmission of data, voice and video at 384 kbps to 2mbps as against the current technology’s maximum speed of 9.6 kbps. The speed allows easier Internet browsing and faster downloading of large files. The "first generation" was the "cellular mobile radio telephone" that used analog voice signaling. The second generation came in the 1990s, featuring digital voice encoding technology.
Other awardees of 3G spectra include Globe Telecom, Digitel Mobile, and CURE, a company identified with Eastern Telecommunications Phils Inc. (ETPI) and ISM Communications of former Trade Minister Roberto Ongpin.
There were five 3G frequencies up for grabs, but the NTC decided to award only four. Other applicants for 3G spectra which according to the commission did not meet the required technical, financial, and other qualifications include Bayan Telecommunications (Bayantel), AZ Communications owned by businessman Antonio Cojuangco, Next Mobile, Multi-Media Communications (formerly Broadband Phils. which was owned by the De Venecia family until it was bought by a group led by former Home Cable executive Fritz Server), and Pacific Wireless.
"We have been testing a number of 3G cellsites and can now service customers on a trial basis in Metro Manila and Metro Cebu. What’s more, we have already ordered the network facilities needed to establish nationwide 3G coverage at the shortest possible time," Nazareno said. "We will repeat the rapid rollout that we accomplished in deploying first our analog and then our GSM network infrastructures. We are in 3G for real."
Among the companies that applied for 3G license, Smart ranked highest, garnering a perfect score of 30 based on the NTC 30-point grading system designed to gauge the capability of aspiring telco operators to massively and effectively provide 3G services.
As a result, Smart has been assigned the largest radio frequency allocation - 15 MHz compared to 10 MHz for the other operators.
"Moreover, it now has the choice of the best frequency spectrum. This will enable Smart to rapidly deploy its 3G network nationwide and also offer the highest quality 3G service to its subscribers," company officials said.
"We will fully utilize these 3G frequencies to provide the best quality service to our customers," Nazareno added.
The grading system used, as detailed in section 3.6 of NTC’s 3G ruling, measures the capability of prospective operators to: massively roll-out 3G network in at least 80 percent of the country’s towns and cities in the next five years; interconnect with other 3G and mobile operators; and share network and facilities with other providers in areas where demand limits service provision to just one operator.
3G is shorthand for the next generation of mobile communications networks running on the WCDMA (wireless code division multiple access) platform. This technology allows for faster data transmission speeds from 114 kbps up to 2 Mbps, making possible high-speed data communications and mobile multimedia services such as video conferencing, audio streaming and mobile internet.
In November this year, Smart demonstrated its readiness to offer a full-range of 3G services in a live demo at an international conference in Cebu. Witnessed by the members of the press, this was conducted in conjunction with the annual conference of the Inter-working Roaming Expert Group (iREG) of the GSM Association.
During the demo, the company not only showcased a live video conference call on a Smart-to-Smart network, but also completed an international roaming call between Smart and Telecom Italia Mobile. Also, it sampled breakthrough services such as broadcast streaming and simultaneous voice and messaging.
"The success of these latest 3G tests reinforces Smart’s leadership position to efficiently support real applications in a 3G network," the chief executive said.
He added that apart from preparations covering hardware and equipment, the company is also putting into place necessary support systems such as billing and applications.
Smart officials said that the company had started preparations for a seamless transition to 3G as early as five years ago.
In December of 2000, Smart in cooperation with Nokia Networks conducted the first successful 3G video call in the country in the presence of NTC officials. Using experimental equipment, this test call recorded data transfer rates of up to 216.9 kbps.
In 2000 as well. Smart started installing new GSM (global system for mobile communications) base station equipment that not only substantially increased the capacity of its digital mobile phone network, but also made it easier to install the 3G system in the future.
This modular GSM equipment is about half the size of earlier signaling devices but can handle over twice the number of subscribers. It also has the added advantage of being upgradeable to support the operations of a 3G mobile phone system.
"Early on, we have been taking concrete steps in preparation for the next generation wireless technologies," according to Peña. "The base station equipment we’ve installed has the added advantage of being upgradeable to support the operations of a 3G platform," he added.
"The installation of this modular GSM equipment fits neatly into Smart’s overall 3G preparations. Now that the 3G equipment is available, the 3G capability of these base stations can be readily activated, greatly simplifying the rollout of 3G infrastructure," Nazareno also noted.