Extelcom allots $1.3 billion for cellphone re-entry

MANILA, Philippines - Express Telecommunications (Extelcom) is re-entering the cellular mobile telephone service (CMTS) business through a $1.3-billion, 10-year infrastructure rollout and a shift from its old analog service to one that uses the latest digital technology.

The rollout program will be financed by a combination of debt and equity financing, company officials revealed.

Extelcom officials said they believe the company can bring in significant benefits to the Philippine consumer, industry and the general economy once it launches its mobile services.

With its re-entry in the market, the company expects competition to intensify and this will result in an overall decline in voice tariffs and higher subscriber penetration.

They emphasized that Extelcom’s re-entry will “entice stiff domestic competition” in the CMTS market, which is in accordance with the National Telecommunications Commission previous pronouncements on competition.

“The company’s re-entry will give the Filipino consumers more choices,” Extelcom OIC Luisito Sapiera said.

Extelcom said overall service level and quality are expected to be driven up across all operators in the medium term as a result of increased competition. “Existing players are anticipated to upgrade its own network in preparation of a new entrant in order to protect its own market share to the benefit of the Filipino consumer,” Sapiera noted.

Extelcom, which is still under corporate rehabilitation, said it expects it will now have the chance to exit rehabilitation and become a viable telecommunications company. It added that it will also put its frequency to optimum use by following its rollout commitment, even as it expects that government stands to collect higher spectrum regulatory fees (SRF) with its revival.

Based on its application with the NTC, Extelcom’s rollout will focus on both coverage and quality. It will rollout a network with broad population and geographic coverage in the first five years.

The company said it aims to achieve a market leading position in the Philippines and to support its ambition, it will build a network of 5,365 base stations over 10 years.

Meanwhile, San Miguel Corp. is currently in talks with Extelcom’s biggest shareholder TransDigital Extel, reportedly controlled by businessman Roberto Ongpin, for the acquisition of TransDigital’s stake in the oldest mobile operator in the country. However, another Extelcom owner, Lopez-controlled Marifil Holdings Corp., is opposing the sale, saying TransDigital’s stake was illegally acquired. Marifil plans to raise all the way to the Supreme Court the alleged dilution of its stake in Extelcom from 46 percent to eight percent.

TransDigital recently advanced P95 million for the payment of Extelcom’s unpaid spectrum user’s fees to the NTC.