Valuable BWA frequencies

Smart Communications chief wireless adviser Doy Vea hit the nail right on the head when he said that broadband is the next cellular.

Globe Telecom’s revenues from broadband services grew 73 percent during the first quarter of 2008 as compared to last year while subscriber base in the same period was up 86 percent.

As of end-March 2008, Globe had a broadband subscriber base of 128,554, of which 110,982 are from wired broadband or DSL and 17,571 from fixed wireless.

PLDT’s broadband business likewise registered remarkable growth. Its retail DSL subscriber base reached 300,000 at the end of the first quarter.

Its wireless broadband service under the Smart Bro brand also showed no signs of slowing down as subscriber base grew 14 percent to reach 348,000 as of end-March 2008. Wireless broadband revenues went up 122 percent to P919 million in the Jan-March 2008 period.

It’s no wonder then that these two companies are putting in so much money into expanding their broadband network and services. Smart just acquired for P420 million the companies that own CURE or Connectivity Unlimited Resource Enterprise owned by Bobby Ongpin and is investing another P210 million to help CURE build up its 3G network. The acquisition of CURE will help Smart provide expanded and enhanced 3G services nationwide, including higher speed wireless broadband services.

Smart Broadband Inc. meanwhile is seeking additional broadband frequencies for WiMax or Worldwide Interoperability for Microwave Access, a technology for the delivery of last mile wireless broadband access as an alternative to cable and DSL as well as to 3G.

Globe is likewise looking at WiMax as the technology that will boost its wireless broadband business.

Even Lopez-owned Bayan Communications has been experiencing exponential growth with its broadband operations.

With broadband wireless access or BWA promising to be the next cash cow for telecommunication companies, telco providers are now fiercely competing for allocation of available BWA frequencies.

Unfortunately, the frequencies available for BWA are limited. For this reason, the National Telecommunications Commission as early as Aug. 23, 2005 reallocated the frequency bandwidths 2500-6590 Mhz for the use of BWA.

Based on NTC records, the following assignments for the band 2500-2690 MHz have already been made as follows: Innove Communications 15 MHz (2500-2515 MHz), Bayantel 5 MHz (2515-2520 MHz), Digitel 15 MHz (2520-2535), eTelco 15 MHz (2545-2560 MHz).

Several telcos have pending applications for BWA frequencies, among which are Smart Broadband Inc., Innove, Bayantel, and Digitel and Liberty Broadcasting Network (LBNI). In the case of LBNI, the application was filed Jan. 8, 2008.

According to the NTC frequency management division (FMD), former NTC commissioner Abraham Abesamis approved LBNI’s request for the exclusive use of BWA frequencies 2540-2545 MHz, 2580-2595 MHz, 2535-2540 MHz, and 2565-2580 MHz. LBNI owner Raymund Moreno had in his possession two letters (June 26 and 28, 2007) both signed by Abesamis assigning to his company these frequencies. But FMD records showed that no application was ever received for the said assignments to LBNI, bolstering reports that the assignments were made in secret.

FMD Engineer Roberto Tolentino, in a letter to NTC commissioner Ruel Canobas, noted that the limited availability of BWA frequencies is aggravated by the “LBNI situation since LBNI’s occupation of the said bands will result in the further reduction of the configuration such that only 2 TDD bands at 30 MHz bandwidth and 1 TDD band at 15 MHz bandwidth will be available.”

The present NTC leadership is now faced with the unenviable task of explaining, not only to the Regional Trial Court of Makati that has granted LBNI’s petition for receivership, but also to the other telcos applying for BWA frequencies how an obviously bankrupt LBNI managed to secure these frequencies from the NTC.

Highly placed sources have told us that the FMD is now working out a recommendation to the NTC leadership for the revocation of all frequencies granted to LBNI for the simply reason that the company is bankrupt and that its bandwidth can be put to use by legitimate telcos.

Last Friday, the NTC executive committee met precisely to ask the FMD about the status of the LBNI frequencies. If reports that LBNI has sold some of these frequencies have been sold, the NTC leadership wants to know who are now in possession.

According to insiders, the NTC is worried about rumors that the company’s owner has been peddling LBNI and its frequencies to a certain company based in Saudi Arabia for the past eight months. Moreno has allegedly flown to that country four times over the same period.

Hopefully, all these reports will push the present NTC management into acting fast. After all non-action on its part could prove to be worse than the sins of the previous NTC leadership.

I remember when Commissioner Canobas told me that it is within the NTC chairman’s prerogative to dispense with the requirement of public hearings in the grant of frequencies, in effect saying that it was perfectly legal for Abesamis to have secretly awarded bandwidth to LBNI. I hope for Commissioner Canobas’ own sake that he was just joking.

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