this news article looks like a propaganda sent out by some action group or lobbyist funded by either PLDT or Globe to make them look good 🙂 he he he.

since the SMC/Telstra initiative broke out last year, i have closely monitored this item. it has a big impact to ordinary people like me staying in the countryside to have a 'decent' internet access - one of the major issue in the coming May election.

below are my notes to have an objective view of the issue/s on hand based on my understanding of what's happening ... with a premise that the more competition/open the telecom industry is, the better the service will be at the right price that consumers are willing to pay.

1. for years, smc has been trying hard to establish a foothold in the telecom industry. it's initial attempt (local company is liberty) before, with another middle-east partner was a disaster. i think the failure was mainly due to the high initial infrastructure cost that was required for the business which was not properly anticipated by the stakeholders - bottomline, rather than putting more capital into the business by the partners, they decided to simply take the losses and discontinue the venture. this time (2015), smc is making another attempt with telstra as the major partner.

2. smc/telstra will use 4G/LTE for their mobile network which will uses the 700 MHz frequency. 700 MHz is the lowest frequency allocated for telecoms - lower frequency means greater coverage area and better signal penetration into obstruction (e.g. walls). it means, lower infrastructure cost for the new player to setup. FYI, the 600 MHz is allocated to tv broadcast. smc is already license to use some 700 MHz frequency.

3. based on the news, the smc/telstra deal is not yet a done deal - 2 issues kept coming up, one is that smc license to it's 700 MHz can change in the future and the initial cost that telstra is budgeting for the project is too small. whether it's true or just a propaganda by the competitors is anybody's guess :-).

4. pldt/globe wants NTC to auction the 700 mhz of smc since smc is hardly using it. why the big interest specifically with the 700 mhz ... 4G LTE runs on it.
- both pldt/globe also has their own 700 mhz (around 300 slots total for both) which they are already currently using right now, including 4G.
- their reason for additional 700 mhz allocation is to improve their service in terms of quality and coverage by using 4G ... if this is the case, why can't they use their existing 700 mhz allocation? ... i think its because they are already using most of it for other means ... i think this is the one they are using for their 2G network in which voice/sms is riding right now.
- they can't let go of their 2G because of it's low operational cost - most of the infrastructure has already been fully depreciated since 2G has been around for a long time. also, there are still a lot of people who are not using smartphone, especially in the provinces.
personally, i think that pldt/globe would prefer filipinos in the countryside to use 2G instead of 3G/4G as it means less cost and more revenue to them.
- in telecoms IT, service can be improve 2 ways, (1) increase capacity per allocated MHz which means higher cost to the telecom operator ; (2) have more allocation for the new 4G tech. although it also involves cost to the operator, its has an added benefit of leaving nothing for its competitors to use 4G :-).

5. another issue that pldt/globe is saying is that smc has more 700 mhz allocation which give them a comparative advantage to others (pldt/globe).
if you dig deeper why this happened, smc got this additional 700 MHz by buying a distress telco (e.g. extelcom) before as a business decision/strategy. if pldt/globe had the foresight before, they should have bought this telco in the first place instead of smc.

6. with the advent of the new 4G technology it's possible to have voice/sms/internet all in a single 700 MHz frequency ... why is pldt/globe afraid of the smc/telstra tie-up ... because telstra already has the undersea cable for internet connection ... it means with 4G alone, they can provide internet access together with voice/sms ... it's like doing a leap frog for smc to have a foothold in the telecom industry with a smaller investment cost compared to setting up 2G/3G.

7. i think pldt/globe is ok with smc going into telco business ... provided it setup it's own costly infrastructure which pldt and globe did before when you only have 2G/3G technology that was available ... why would a rational company do that when there is already 4G that can make things cheaper? ... the problem with pldt/globe is that they still cannot accept the fact that with 4G technology, any company can easily go into the ISP business.

8. globe has been asking NTC to auction off the 700 MHz of SMC since 2005 and NTC has not done anything because they know it's anti-competition ... all this will clear up after the may election, depending on the next administration and their strategy to improve internet service.
the govt strategy before was really palpak ... what they did was the easy way out with no cost involve to them ... just allocate the frequency to all the qualified operators and collect the annual fees and let the operators control how they want to use the frequency - the basic service then was to provide for voice/sms, internet was only a value added service by the operator, which means they are not bound to maintain any service level 🙁

cheers 🙂

Boo!