3G - Philippines publishes 3G guidelines

Von Grace S.

The Philippines" National Telecommunications Commission (NTC) has finally released the guidelines governing the distribution and licensing of frequency bands for third-generation mobile services (3G), but the country?s biggest mobile service provider is not in any rush to apply and is instead urging the licensing body to postpone the frequency distribution to a much later date.

Better known by its acronym, 3G is the next generation in mobile services that would enable the delivery of multimedia content such as streaming video on mobile phones.

?We believe in 3G. It is the future. But I think this isn"t the time for 3G yet,? Philippine Long Distance and Telephone Co. (PLDT) chairman Manuel ?Manny? V. Pangilinan said. PLDT is the parent company of mobile telecommunications operator Smart Communications Inc.

?The local market is not yet ready for 3G,? stressed Pangilinan, adding that it is ?a very expensive proposition to go 3G at this point.?

According to the PLDT chair, mobile communications is still a handset-driven business. And, at the moment, handset prices for 3G phones are simply too prohibitive for most users. They remain too expensive for mass adoption in the country.

Moreover, Pangilinan underscored that the existing set of local mobile operators is still mostly on 2.5G (that is, Global Packet Radio Service or GPRS) and 2.75G (or EDGE). These players have invested heavily in building their networks and are yet to recoup most of their investments. It would be extremely imprudent to rush into building something which will not be immediately used by the market, he said.

?The investment involved in building a 3G network is formidable. Why spend scarce resources on something that will not meet current market needs?? the PLDT chair asked. ?I think the postponement is prudent, rather than rushing into something which will not immediately hold.?

The telecom veteran stressed that the local market may not be ready for 3G until after three or five years.

NTC Guidelines

In late September, the NTC released the draft guidelines governing 3G frequency licensing and distribution. Based on the draft, the five frequency bands allocated for 3G are:

- 1920 to 1935 MHz / 2110-2125 MHz

- 1935 to 1950 MHz / 2125-2140 MHz

- 1950 to 1965 MHz / 2140-2155 MHz

- 1885 to 1900 MHz / 1965-1980 MHz

- 2010 to 2025 MHz

Each of these frequency bands will be assigned to different services providers using different technologies. Three of the frequencies will be issued to Wideband CDMA (WCDMA) service providers; one for a carrier radio transmission technology (CDMA2000) operator, and one for time division duplex (TDD) player.

According to the NTC draft, this arrangement will ?ensure compliance with the requirement of technology neutrality and foster more effective competition.?

NTC commissioner Roland Olivar Solis said he hopes to begin issuing 3G licenses by next year. But for this to happen, 3G operators must contend with the high cost of building up a 3G network and of applying for frequency licenses.

Based on the draft circular, qualified applicants must post a performance bond of P300 million (US$5.3 million) and make an up-front payment of P450 million.

If there are more qualified applicants than the allocated frequency bands, the NTC will hold a bidding where the floor price has been set at P450 million.

The government will also charge annual spectrum user fees of P100 million for each band. Authorized 3G network operators will also have to pay an additional P2 million for every 100,000 subscribers above the first four million users.