Unauthorized frequency use

A few days ago, one major daily reported Globe Telecom has been illegally using spectrum assigned to Altimax Broadcasting Co. for its broadband services.

Altimax was granted a franchise to operate radio and TV broadcasting stations in the Philippines and was given by the National Telecommunications Commission (NTC) provisional authority to install, operate and maintain a nationwide direct broadcast satellite service and assigned certain frequencies.

Velarde Inc., the majority shareholder of Altimax, later sold most of its shares to the Globe group, in particular Bethlehem Holdings Inc. which became the majority stakeholder of Altimax in 2009.

Velarde, which remained a minority shareholder of Altimax (14% stake), then found out that Altimax leased frequencies assigned to it by NTC to another Globe subsidiary Innove Communications. Velarde Inc. president Mel Velarde said in a letter to NTC that Innove used said frequencies for its broadband/WiMax services which were intended for Altimax’s broadcast services.

The lease, Velarde said, resulted to the inability of Altimax to use the frequencies for its own business operations. According to Altimax’s 2014 audited financial statements, its sole source of income is the P90 million it receives annualy from Innove for the latter’s use of the former’s frequencies, such arrangement beginning in 2009 soon after BHI became the majority shareholder of Altimax.

Velarde, in his letter to the NTC, emphasized that under Altimax’s franchise (RA 8607), Altimax cannot lease, transfer, sell, or assign its franchise or the rights and privileges acquired thereunder without prior congressional approval. He also noted NTC did not approve both Innove’s lease of Altimax’s frequencies and their use for a purpose other than what it was intended for.

He stressed Velarde Inc.’s did not give its consent to the illegal or unlawful transaction with Innove, even as he asked the NTC to look into this matter and consider the same in Altimax’s forthcoming application for an extension of its provisional authority.

He also called NTC’s attention to the fact of possible foreign ownership in Altimax through BHI, which though appearing to be Filipino-owned, may actually be foreign owned in violation of foreign ownership restrictions in broadcasting entities.

High hopes for BPO sector

Revenues generated by the local business process outsourcing (BPO) sector is expected to surpass overseas Filipino workers (OFW) remittances by next year.

According to Jose Mari Mercado, who heads the Information Technology-Business Processing Association of the Philippines, while OFW remittances have been growing at a rate of six percent every year, the IT industry’s growth is at 15-18 percent each year.

The IT and business process management (IT-BPM) sector, the group said, is on track to hit its $25-billion revenue target in 2016 compared to the $22-billion it earned last year.

OFW remittance levels are at $26 billion, and at the rate the IT-BPM industry is going, it can easily surpass OFW remittances by next year. By 2017, the IT-BPM sector is expected to earn $28.9 billion.

Even the Bangko Sentral ng Pilipinas (BSP) recognized the fact that the IT-BPO sector is not just the bright spot in Philippines, but the fastest growing industry in the country. The industry expects to employ 1.3 million Filipinos  by 2016 and bring in $40- to $50-billion by 2020.

The Philippines did not become the country of choice for BPO services, edging out India as the call center leader of the world, overnight.

A report from rappler.com revealed the following:

“Credit is due to the handful of individuals who saw the potential in the business in its early stages. Among them are the likes of Rainier ‘Bong’ Borja, who is often regarded as the most articulate voice of the Philippine BPO industry; Karen Batungbacal for her early involvement and series of contact center firms; and Secretary Mar Roxas, who, during his tenure as secretary of the Department of Trade and Industry, saw the potential of the industry, reached out to key leaders to promote foreign investment, and helped shape the landscape of BPO into what it is today.

“In fact, one of the key contributions Mar Roxas made to the BPO industry was lobbying in Congress to revise Republic Act 7916, so that buildings or floors in buildings could register as an ecozone. That meant the budding BPO industries were exempt from paying national and local taxes, and only had to contribute 5 percent of their gross income as tax – a major enabler during that time.

“Another significant but unexpected contributor to the BPO industry was Bill Gates. He donated Microsoft Apps licenses to the PCPS program, which not only saved the government huge expenditures, but during the critical, early stages, it also enabled the BPO industry to function and thrive…”

Roxas is said to have also lobbied in Congress to revise Republic Act 7916 or The Special Economic Zone Act of 1995 so that buildings or floors in buildings could register as an ecozone. He also established the Contact Center Association of the Philippines, an umbrella group which promoted the country as a destination for IT-BPO companies.

For pioneering the establishment of BPO in the Philippines, Roxas has been called the Father of BPO Industry in the Philippines.

Back to basics

Businesses should focus more on being financially steady and credible in order to earn the trust of clients and customers, according to Ramon F. Garcia, founder and managing partner of Ramon F. Garcia & Co., CPAs (RFG & Co.),

RFG & Co. provides practical solutions while working hand-in-hand with clients to get the desired results when it comes to financial management. And according to Garcia, they have achieved more than 95 percent good results.

Just recently, RFG & Co. was able to help a major client save several millions of pesos in terms of registration fees, licenses and tax payments, but all within the confines of the law.

Another client in the food industry was also satisfied after RFG & Co. was able to help them restructure and strengthen their internal accounting control systems.

RFG & Co. also became dynamic in order to survive, particularly in this world of fast-paced technology. It was one of the pioneers in using IT in their systems, but Garcia emphasized it is still the human brain that processes everything, so one has to maintain solid knowledge on the basics of accounting and auditing.

Garcia is proud of the company’s organic growth, explaining he helped grow the company through hard work, nurturing its people by providing them with professional growth to help them grow from within to protect and maintain the company’s culture, and ‘values system.’

RFG & Co., which is celebrating its 35th year this year, is a proud and valuable partner of Crowe Horwath International, one of top 10 biggest accounting networks worldwide.

For comments, e-mail at [email protected]