The National Telecommunications Commission in the Philippines announced it will issue one nationwide and four regional permits for new mobile phone operators there.
Kari Roe, analyst for Asia and the Pacific Rim for International Technology Consultants in Bethesda, Md., said the tender is for an 1800 MHz license, which will likely be technology neutral, at least for now.
There have been many changes to the license tender to date. The original idea was for 12 licenses divided among four regions. This changed to the current offering, but many expect it to change again.
In particular, the nationwide license will be unable to overlap the four regional ones. The four regions include Visayas, Mindanao, Luzon and the capitol of Manila, the most desired market.
“I just can’t quite imagine that they’ll license it in this way. There’s been so many changes that I think there will be more,” Roe predicted.
There is also a significant possibility of the tender being delayed until May or later. The Philippines has a rule that no tender of any kind may be awarded 90 days prior to an election, as to avoid political favoritism or corruption.
The NTC said 24 companies-all of which are Philippine-owned-have expressed interest.
However, the foreign telecom operators with whom they may be in joint ventures were not listed.
The list includes existing mobile phone operators Globe Telecom, Philipino Telephone Corp. (Piltel), Isla Communication Co. Inc. (a subsidiary of Asiacom Philippines Inc.), Express Telecommunications Co. and Smart Communications Co.
The largest is Piltel, which recently awarded Telular Corp. a $2.8 million contract to provide fixed wireless terminals for a digital Advanced Mobile Phone Service network. Piltel also operates a Code Division Multiple Access network.
Globe Telecom operates a Global System for Mobile personal communications services network, as do Isla and Smart.
Smart also operates a Total Access Communications System network. Express Telecom operates an AMPS network.
Nextel Communications Inc.’s subsidiary, McCaw International Inc., plans to launch an enhanced specialized mobile radio network based on integrated Digital Enhanced Network technology by the end of the year.
The wireless phone penetration in the Philippines is somewhat small, with 960,000 wireless subscribers estimated in 1996.
Five existing players in this market seems a bit much already, and the possibility of adding others has raised analysts’ eyebrows.
But because of the island nature of the country, wireline telecom infrastructure is difficult to build out. Only 1 of 57 residents own phones. As such, wireless technology is considered to have great potential.
But because of the crowded market, fraud is a large problem there, both handset cloning and people who default on their bills. Subscribers tend to move from one provider to the other in areas where they can because price wars are brutal.
