3G’s stunted story

It has been more than a half year since the two telecom giants had tried to outdo each other in launching the much-ballyhooed third-generation wireless services that we have come to know as 3G.

Globe Telecom Inc. and main rival Smart Communications Inc. made a big fuss over which had the better capability to start 3G and offer better high-speed service; who would penetrate the mass market and who would capture high-end clients; and even who would actually offer it first.

Smart started its 3G trial for free on Feb. 14, while Globe launched commercial services in end-April, a day ahead of its rival’s May 1 formal offering. Both likely felt smug about their respective accomplishments, having felt that each one scored a major victory against the other.

Now, it seems 3G has disappeared in both players’ list of priorities. In fact, they seem to be more gung-ho on the prospects of broadband or high-speed Internet connection, which is also what 3G is except that the former is on full-size screens in personal computers.

Empty promise

What was touted as the next killer application for cellular phone use, with expectations of rivaling text messaging or even surpassing its popularity, is now just an empty promise. Nope, Filipinos are not jumping excitedly about 3G nor are they ecstatic about using their mobile phones to browse the Internet.

Neither Globe nor Smart will say how many subscribers they have so far signed up for 3G services, or if there are complaints from disappointed customers who were promised the benefits of the new technology. Instead, both are pointing fingers at the price of 3G handsets as the major stumbling block to its lack of popularity. Industry players are saying that handset prices must go down to about $100 each from the current $200 to $400 before 3G can take off in the country.

Of course, this logic will not always hold water. Remember my previous column on banking wherein we discussed how lower interest rates, contrary to expectations, were not exactly encouraging borrowing? Well, it seems that people are just content with what they actually enjoy doing most with their mobile phones, i.e., sending simple text messages.

Delayed infrastructure investments

A few months ago, Smart found a smarter excuse to justify delays or even scale down its planned investment in 3G. The Board of Investments, relenting to pressures from the Finance department, withdrew the six-year income tax holiday — the most coveted incentive — it had previously agreed to give telecom operators going into 3G.

Smart, in reaction, said it was re-thinking whether to push through with its plan to spend P33 billion on this latest technology over a five-year period. With already like P300 million so far spent, the company reasoned out that 3G would not be a viable proposition without the income tax breaks.

Globe, on the other hand, says its plans are still good to go, and has no intention of reneging on its commitment to spend P5 billion in the first two years of bringing 3G to full operation.

Digitel Telecommunications Phils. Inc., the phone company of the Gokongwei group, said it will spend P6.3 billion for a three-year rollout of 3G, and expects to employ 40 people once it starts on June 2007.

Political meddling

Unfortunately for the phone companies, the BOI incentives aren’t the only hurdle. Congress hasn’t stopped picking on the 3G licenses that the National Telecommunications Commission had awarded to four companies almost a year ago.

Some lawmakers want the NTC to recall all licenses and re-bid them. Now that the telecom regulatory body has a new commissioner, the chances of a re-bidding and the subsequent recall of licenses is very much a possibility.

Hopefully, the new appointee, retired navy rear admiral Abraham Abesamis, will not try to undo the programs, including the new competition policy that his predecessor had started. But this is another story to be covered in future column.

We all know how a possible recall of licenses would only scare foreign investors away, further hurting our already tarnished reputation. Remember that Globe and Smart have Singapore Telecommunications Ltd., NTT and NTT DoCoMo, and First Pacific Ltd. in their list of global shareholders.

Taking the licenses that have already been awarded would just revive the prevalent sentiment that the Philippines is a country that rethinks its laws and major fiscal and incentive policies as often as the weather changes.

Pushing back timetables

What is becoming apparent for now is that, even with incentives, the mobile phone companies are not too optimistic about the financial prospects of going into 3G.

Even the conservative timetable of Digitel and the little known Roberto Ongpin company named Connectivity Unlimited Resources Inc. will likely be pushed further than 2007, the year that these two companies promised to start offering 3G.

Who wouldn’t have second thoughts? Heck, even those who own 3G-capable handsets are reluctant to pay more for new services like multi-media messaging, Internet connection and video calls, not to mention the inconvenience of having to change SIM cards, and consequently mobile numbers.

Finding a healthy market for 3G may be a little too much to ask for in a country that still has among the lowest per capita income in the region. Text messaging is still probably the best thing that has ever happened to the Philippine telephone market.

For Filipinos, SMS is still the cheapest tool of communicating with their eight million kins abroad. In fact, text messaging seems to be getting even cheaper, thanks to competition. Unlimited text messaging promos have brought the cost of text messaging to as low as 20 centavos per message, if not lower.

Until phone companies devise a way to make 3G as affordable to the mass market, that technology will most likely just pass us by. If that happens, 3G in the Philippines could just easily stand for Going, Going and Gone.

Scrambling for Poker Tour Finals seats

With just a week to go before the Grand Finals of the Philippine Poker Tour (PPT) Million-Peso Hold’Em Philippine Championship, poker enthusiasts are scrambling for available seats via the satellite/qualifying tournaments being held in several areas such as the Elbow Room at Metro-Walk, Pasig (every Tuesday and Thursday), San Mig at Alabang Town Center (every Wednesday and Friday), and at Valle Verde Country Club, Pasig (every Wednesday and Friday).

Tomorrow, Saturday, Casino Filipino Pavilion-Manila will hold its last qualifying competition with registration starting 12:30 pm and the tournament proper at 2 pm. Nonoy Tirol’s Rajah Hotel in Cebu City is also expected to wind up its satellite schedule this weekend.

The PPT Million-Peso Hold’Em Philippine Championship is the biggest non-wager poker skills competition to date. Over 700 poker players participated during the past four months of satellite tours conducted at major Casino Filipino sites such as Angeles City , Tagaytay, Bacolod , Cebu, Davao and Metro-Manila.

Those who failed to make it via the satellite route may still join the Grand Finals by registering on a first come first served basis on 16th December 2006 at Casino Filipino Pavilion-Manila starting at 12:30pm.

Details about venues and schedules of qualifying/satellite tournaments are posted in the Philippine Poker Tour (PPT) official web site at www.PhilippinePokerTour.com. Those interested to join these satellite/qualifying tournaments may also call the PPT Secretariat (c/o Cindy) at 817-9092 or 812-0153.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City . Or e-mail me at [email protected] or at [email protected]. If you wish to view the previous columns, you may visit my website at http://bizlinks.linkedge.biz.