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DICT, NTC preparing rules for selecting telco to compete with PLDT, Globe

The government is preparing guidelines to support the entry of a third player to compete with PLDT Inc. and Globe Telecom, the so-called telco duopoly that the Duterte administration has committed to break.

Eliseo Rio Jr., acting secretary of the Department of Information and Communications Technology (DICT), on Monday said that the government, through the DICT and National Telecommunications Commission, was preparing the rules for a selection process, which he compared to a “beauty contest.”

The update came as Presidential Communications Secretary Martin Andanar said China had selected state-run China Telecom (CT), its third largest mobile player, to invest in the Philippines through a domestic partner.

The Philippine Constitution sets a 40 percent foreign ownership cap on certain sectors, including telecommunications.

Rio said that telcos from other countries were also welcome to enter the Philippines.

Telco backbone
Melvin Matibag, CEO of the National Transmission Corp., whose nationwide power and fiber optic network could be used as a telco backbone, said the state-run corporation could launch telecommunication services if its charter were amended.

“The way we project it, for Luzon we can do it in six months [and] the entire country within one year,” Matibag said.

A strong strategic partner, usually a foreign telco with deep pockets and technological expertise, is needed if the third player is to take on PLDT and Globe, which are partly owned by Japan’s NTT Group and Singapore Telecommunications, respectively.

In a social media post on Monday, Rio said that the rules would serve as the basis for the government to assign highly coveted frequencies to a third telco player.

Radio frequencies are the lifeblood of modern telecommunications. These allow the transmission of various forms of data, enabling phone calls, text messaging and internet browsing on smartphones.

Frequencies are owned by the government.

“CT, while chosen by China, must compete with other interested foreign telcos to be chosen by our telcos [or]
consortium,” he added.

China Telecom operates the biggest wireless network, the largest fixed-line network and the third largest mobile network in China with total assets exceeding $105.78 billion.

Companies that have expressed willingness to challenge PLDT and Globe include Philippine Telegraph & Telephone Corp. (PT&T).

Strategic partners
Earlier, PT&T chair Salvador Zamora II said the company was in talks with strategic partners, including China Telecom and South Korea’s LG Plus.

The coveted radio frequencies were the main target of PLDT and Globe when the two joined forces in 2016 to buy out San Miguel Corp.’s telco unit for almost P70 billion.


source: http://business.inquirer.net/242349/chin...io-jr-dict
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...yup. talagang ganyan sa market Big Grin

3rd player talks affecting trades in telco shares

Shares of telecommunication companies PLDT Inc. and Globe Telecom have been negatively affected by speculations of a third telco player coming in, while share prices of companies that may possibly benefit from the entry of the much-awaited third player have been on the rise.

Shares of Now Telecom, for instance, rallied by 1.81 percent at the close of the 2017 to finish at P2.82 per share from just P2.2 per share last Oct. 25.

Now Telecom of Mel Velarde has expressed interest in joining the government’s planned auction of surrender and recalled spectrum frequencies, the National Telecommunications Commission earlier said.

EasyCall Communications Philippines likewise saw its share price rise by 5.71 percent at the end of 2017 to end at  P18.50 per share. Last Sept. 25, this was just at P3.25 per share.

Traders attributed the increase in the share prices of these two companies to the possible partnership with Chinese or foreign telco players that are interested in entering the Philippines following President Duterte’s call for the entry of a third telco player.

Share prices of PLDT, chaired by tycoon Manuel V. Pangilinan and Globe Telecom, on the other hand, have seen significant declines.

PLDT closed the year at P1,480, flat and significantly lower than June 15, 2017’s level of P1,900 per share.

Globe, meanwhile, closed 2017 at P1,900, lower than the P2,228 closing price last June 7.

Aside from Chinese telecom players, four other companies from Japan, South Korea, US, and Australia are interested to partner with local firms and become a third telco player in the country, the Department of Information and Communications Technology (DICT) said.

DICT officer-in-charge Eliseo Rio Jr. said in a recent briefing Telstra Corp. Ltd. of Australia is interested in entering the Philippine telco market.

President Duterte has invited Chinese telco companies to invest in the telco industry to break the duopoly and provide more options for consumers.

The DICT and the NTC are planning to conduct the bidding for the available frequencies within the first three months of 2018.


source: http://www.philstar.com/business/2018/01...lco-shares
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...Globe follows PLDT's capital expenditure binge

Globe holds 2018 capex budget steady at $850 million

GLOBE Telecom, Inc. has set aside a capital expenditure (capex) budget of $850 million (P42.37 billion) for 2018, unchanged from a year earlier, primarily to meet demand for bandwidth-intensive content.

In a statement, the telecommunications company said the capex budget was approved by its board.

Globe President and CEO Ernest L. Cu told reporters in October that the company may keep capex unchanged in 2018.

“Majority of the company’s capex for 2018 is geared to meet customer demand for more bandwidth-intensive content, which, in turn, will support the revenue momentum of our data-related services”, Mr. Cu said in the statement.

Mr. Cu said capital spending for the year is intended to finance the delivery of fast Internet service to two million homes by 2020.

Part of the capex will also be used for the deployment of multiple-input, multiple-output (MIMO) technology to expand and enhance its long-term evolution (LTE) network.

Globe began deployment of LTE sites using the 700 MHz band in June 2016, after the company and PLDT, Inc. teamed up to buy the telecommunications assets of San Miguel Corp. for P69.1 billion.

In 2017 Globe’s capex budget rose $100 million to finance expansion of its mobile data network.

Globe chief financial officer (CFO) Rizza Maniego-Eala told reporters in October that Globe could issue retail bonds in 2018.

Globe’s attributable profit in the first nine months of 2017 was P12.99 billion, up 11% year-on-year, following a 6% increase in revenue to a record P95.14 billion.

It registered a 7% increase in mobile revenue in the nine months to P73.1 billion, led by strong uptake of mobile data. Home broadband revenue grew 8% to P11.7 billion, driving the company’s customer base to 1.26 million subscribers by the end of September. 


source: http://bworldonline.com/globe-holds-2018...0-million/
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...well, that frequency needs to make money first...it's an investment, and it needs to recoup the money invested there in that acquisition of that frequency

PLDT, Globe wary of government’s plan to reallocate frequencies

PLDT, Inc. and Globe Telecom, Inc. are wary of the plan of the Department of Information and Communications Technology (DICT) to ensure a more “equitable” allocation of frequencies in the telecommunications industry, particularly when a third player comes in.

PLDT Chairman, CEO and President Manuel V. Pangilinan said the public should “give careful attention” to the possible reallocation of frequencies, adding the 700 megahertz (MHz) spectrum acquired by PLDT and Globe from San Miguel Corp. in 2016 are already being “extensively used.”

“That’s a serious matter of public interest. I think we should give careful attention to that particular subject matter. So far as we’re concerned, we are clearly using extensively the frequencies we acquired from San Miguel. They’re actively, extensively used by Smart, Sun, Talk and Text,” Mr. Pangilinan told reporters on Jan. 10.

Globe Senior Vice-President for Corporate Communications Yolanda C. Crisanto said the telecommunications company is using the 700 MHz spectrum “to serve the public.”

“As an incumbent, the number of customers we currently serve is our basis for the spectrum we have. Even in the buyout of the 700 MHz assets, we returned a good number of spectrum to the government on the basic principle that this resource should be used for public good. What the government should avoid from happening again is that any single entity holds a large number of spectrum and does not use it to benefit the public,” Ms. Crisanto said in a text message.

PLDT and Globe in 2016 acquired the telecommunications assets of SMC, including the coveted low-band 700 MHz.

The Philippine Competition Commission (PCC) earlier estimated only 12.8% of the spectrum will be available for a potential third player in the country.

This is why the DICT is looking at allocating the remaining uncommitted frequencies to a third player, which could possibly be structured as a consortium.

Mr. Rio told reporters last month the DICT does not favor distributing the remaining frequencies to many players, which might lead to buyouts by PLDT and Globe.

Public hearings for spectrum reallocation are expected to be conducted by the middle of February, Mr. Rio has said.

Mr. Pangilinan said PLDT welcomes the possible entry of a third player, and continues to prepare for this.

“But also the main job for us is to really build a superior network for fixed and wireless, to ensure the service is world-class. We said late last year that we would show that with the level of capex that we would announce, hopefully soon enough, that would be north of P50 billion, that is a historic high for PLDT, to demonstrate that we’re getting serious about not only our wireless network but also our fixed (line business),” Mr. Pangilinan told reporters.

Mr. Pangilinan said capital spending on fixed broadband will see “significant increments” compared to 2017.

Globe is keeping its capex flat for 2018, retaining the $850-million capex of 2017. The company said the budget will be used primarily to meet demand for bandwidth-intensive content.


source: http://bworldonline.com/pldt-globe-wary-...equencies/
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...delay in third telco operation is good for TEL GLO

DICT to seek for an extension of deadline for entry of 3rd telco provider

 The Department of Information and Communications Technology on Wednesday said it will relay to President Rodrigo Duterte concerns over the deadline for the entry of a third telecom player after potential entrants sought for more time to prepare.

In November last year, Duterte invited China to be his country’s third telecom provider that will challenge a longstanding duopoly that has angered consumers in a nation said to have the slowest internet speed in the Asia Pacific.

Beijing later picked China Telecom to invest in the Philippines, backed by a consortium of Filipino businesses. A third telecom carrier is targeted to be up and running by the first quarter of 2018.

During the DICT’s first public consultation for the arrival of a third telecom provider, participants pointed out that the March 2018 deadline is “too tight.”

In response, DICT Officer-in-Charge and Undersecretary Eliseo Rio Jr. said his agency will ask for an extension of “two months probably, from end of March.”

“So five months overall,” Rio said, adding that the DICT can only seek for an extension of a few months, not one year.

“We can’t wait for one year. I’m sure the president will not just ask us to resign but kick us out,” Rio was quoted as saying in a report by Bloomberg TV Philippines.

Aside from China Telecom, Malacañang had said South Korea’s LG Uplus Corp., Japan’s KDDI, and a Taiwanese telecom firm that was yet to be revealed were also eyeing the Philippines’ third telecom slot.

According to a timeline presented by the DICT, the drafting of a memorandum circular—which contains the terms of reference for the selection and assignment of radio frequencies for the new player—will happen from January 9 to 19.

The memorandum circular is targeted to take effect on March 6, while the acceptance of bidding documents from participants is set on March 27. The third entrant in the telecom industry is expected to be announced on April 2.

Rio last January 8 signed Memorandum Order No. 001 which spells out the guidelines for the entry of a new major player in the Philippine telecom market.

Under MO No. 001, companies that are interested in the third telecom spot must possess a valid congressional telecommunications franchise, and have a written and binding commitment from a foreign joint venture company, if applicable.

Applicants must also not be an affiliate of Globe Group or PLDT Group of companies.

“The applicant with the highest committed investment for the first five years shall be selected. This commitment should be secured with a performance bond,” section 2 of the document read.

“The new major player shall be assigned radio frequency bands that are now available for assignment as identified by the NTC. Non-compliance with its commitment under section 2 hereof shall result in the automatic recall of the assigned radio frequencies,” it added.

In a January 17 report by BusinessWorld, Rio said plans to reallocate mobile frequency may require legislation, possibly prolonging the process of introducing a third player in the telecom industry.

Incumbents PLDT Inc. and Globe Telecom Inc. hold the majority of radio frequencies. The two telecom giants have said they are using frequencies in the 700-megahertz (MHz) spectrum which they acquired from their purchase in 2016 of San Miguel Corp.’s telco assets.

The Philippine Competition Commission estimates that only 12.8 percent of the spectrum will be available for a potential third player.

Under the Constitution, foreign investors are only allowed up to 40 percent on certain businesses and industries. Hence, applicants will need to seek a local partner, and will require the approval of the PCC for a joint venture.


source: http://www.philstar.com/business/2018/01...o-provider
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...BUY!

Globe gets positive outlook, stock rating now overweight

Globe Telecom Inc. obtained positive outlook and stock rating upgrade from investment house Morgan Stanley amid its move to increase capital expenditures for network improvements.

“Globe has been winning market share from competition in the mobile and broadband segments, which has resulted in Globe outperforming competition by six percent in 2017. Unlike competition, we like that Globe has made efforts to increase its capex to densify the network in preparation for 4G,” Morgan Stanley said in a research paper.

While Morgan Stanley recognizes the risk of the entry of a third player, it said it would take two to three years before a new player is operational.

In the meantime, Morgan Stanley said Globe’s effort in driving improvements in the network is seen as positive for growth.

As a result, Morgan Stanley upgraded the Philippines from its least-preferred market to rank in line with Malaysia and Thailand, at the same time raised Globe shares from underweight to overweight.

A stock rating of overweight means the stock’s total return is expected to exceed the average total return of the Morgan Stanley analyst’s industry (or industry team’s) coverage universe, on a risk-adjusted basis, over the next 12 to 18 months.

The upgrade was given due to lower depreciation charges, increases in data monetization and improvement in customer growth.

Morgan Stanley said it expects Globe’s data revenues to grow at an 11.5 percent compounded annual growth rate from 2016 to 2019 and be driven by the increase in mobile data traffic from a low base, and improved data monetization as a result of lower mobile competition in the market.

Morgan Stanley also forecasts data revenue to account for 73 percent of wireless revenue by 2020, up from 54 percent in 2015.

As President Duterte wants a third telco player to enter the market and break the duopoly, Morgan Stanley said it also expects increased competition in the mobile space in the future.


source: http://www.philstar.com/business/2018/01...overweight
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...ok, so now what?

Globe says nearing two-million broadband line goal

GLOBE Telecom, Inc. has deployed one million broadband lines, halfway through its goal of two million lines by 2020.

In a statement, the telecommunications company said it deployed more than one million broadband lines in the last two years, enabling more users to stream video content.

In terms of wired broadband facilities, Globe deployed fiber broadband in 12 cities in Metro Manila as well as in 19 provinces. Majority of the company’s fiber build are located in Quezon City, Sta. Rosa and Calamba in Laguna, as well as in Cebu and Davao.

Joel Agustin, Globe senior vice president for program governance, network technical group, said the company’s deployment of massive MIMO (multiple input, multiple output) technology has been working to accelerate the roll out of two million home broadband lines, with speeds of at least 10 Mbps (megabit per second) by 2020.

“The goal is to provide for the growing data service needs of our customers and the company will continue to aggressively roll out broadband lines using latest available technologies such as the massive MIMO,” Mr. Agustin said in a statement.


source: http://bworldonline.com/globe-says-neari...line-goal/
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....hhhmmnnn

Globe net profit drops in 2017

GLOBE TELECOM, Inc. reported its net profit fell 5% to P15.08 billion in 2017 despite record revenues, as “increased investments in data network pushed non-operating expenses and depreciation charges higher.”

In a statement, Globe said it recorded a 2% increase in non-operating expenses to P4.27 billion, “largely due to the increase in interest expenses and spectrum amortization related to the San Miguel Corp. (SMC) telco asset acquisition.”

“This, however, was partly offset by the recognition of a one-time gain last September, related to the increase in fair value of the retained equity interest of Globe in Globe Fintech Innovations, Inc. (Mynt),” the company said.

Core net income, which excludes the impact of non-recurring charges and foreign exchange and mark-to-market charges, dropped by an annual 15% to P13.5 billion, with the full impact of the SMC acquisition.

For the fourth quarter, net profit plunged 57% to P2.1 billion, while core profit declined 28% to P2.33 billion.

Consolidated service revenues rose 6% to P127.9 billion in 2017, which the telecommunications giant says is its highest ever for the full year. Revenues for the October to December period went up 2% year on year to P32.8 billion.

“The sustained revenue momentum was driven by the solid growth in data-related products brought about by the increasing popularity of streaming and on demand video content,” Globe said.

Mobile revenues increased 7% to P98.5 billion in 2017, fueled by robust growth in mobile data revenues. Mobile data, which accounted for 44% of the total revenues, saw a 23% rise in revenues to P43.1 billion in 2017. On the other hand, SMS revenues were flat, while mobile voice dipped by 5% year on year.

As of end-December, Globe’s mobile subscriber base stood at 60.7 million, 3% lower than the 62.8 million subscribers reported a year ago. This after the company in 2017 started excluding from its reporting prepaid subscribers who do not reload within 90 days of the second expiry period, versus the previous cut-off of 120 days.

Revenues from its home broadband business went up 7% to P15.6 billion, as its total number of subscribers grew by 15% to 1.3 million. Corporate data business revenues jumped 4% to P10.3 billion.

However, traditional fixed-line voice revenues fell 8% to P3.49 billion in 2017.

“We are confident that our continued investments in our network’s data capacity and coverage, will allow us to continue to provide superior customer experience and improve the over-all connectivity in the country, while building a solid foundation to deliver sustainable long-term growth and shareholder value,” Globe President and CEO Ernest L. Cu was quoted as saying in a statement.

SLOWER REVENUE GROWTH 
The Ayala-led telecom is expecting slower revenue growth for this year, in the “low single digits.”

“In 2017, revenues grew by 6% and obviously, 2018, we’re coming off higher base from that 6% growth. While we do expect our corporate and broadband businesses to grow faster, there will be growth in mobile. Growth in 2017 was also not that large due to base. So, the guidance we have for this year is 4%. Last year, our guidance was mid-single digit, that’s 5%,” Globe Chief Financial Officer Rizza Maniego-Eala said during a briefing on Tuesday.

Mr. Cu said during the same briefing the company still sees growth, particularly in mobile data users.

“There’s still potential of growth… given 56% of customers use mobile data even if 70% have smartphones,” he said.

Meanwhile, Globe may keep its $850-million capital expenditure (capex) for the next two years.

“Historically, if you look at the spending trends, you can project. You see business and data growth. Logical for us but we don’t know the number. That is depending on what we see market needs. We do spend as necessary. If you look at the numbers, we went $750 million in ’15, $1 billion in ’16, $850 million in ’17 and projecting over $850 million to $900 million in ’18,” Mr. Cu said.

As of end-2017, Globe said it spent around P42.5 billion in capital expenditures “to support the growing subscriber base and its demand for date.”

Mr. Cu also said they are focusing on tapping the market for prepaid broadband, rather than rolling out an expansive fiber network, which is the strategy of PLDT.


source: http://bworldonline.com/globe-net-profit-drops-2017/
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Globe considers divesting all or part of its cellular tower assets

GLOBE Telecom, Inc. on Thursday said it considering the divestment of all or part of its cellular tower assets to independent tower companies.

In a statement, Globe said it has started talks with “independent third parties” to establish a tower company that would help speed up the construction of cellular towers in the country.

“We have been allocating over 30% of our total revenues to capital expenditure for the past five years and this level will be sustained over a period of time. An independent tower company will be a win-win solution.  It will monetize assets for capex use and help maintain our consistent dividend policy,” Globe President and CEO Ernest L. Cu was quoted as saying.

“In addition, this greatly helps President Duterte’s initiative to open the telco industry to new players. The plan is for these towers to be open for lease to new and existing players,” he added.

Mr. Cu said this move would reduce the barriers that a new third player would face since it would not have to spend money to build towers.

“This significantly reduces the time needed for a new player to rollout given the 25 permits and up to 8 months required to build one cell tower. Our move is also consistent with our position of being open to more competition in the telecommunications industry,” he said.

The Duterte government is crafting a common tower policy, which will require current telecommunications operators to lease cell towers from tower companies instead of building their own sites. The policy is aimed at providing better telecommunications services to the public and leveling the playing field with the entry of a third player. Guidelines are set to be released this month.

Mr. Cu previously said they are wary of the common tower policy, saying it will not aid in the process of creating more cell sites.

The country only has 16,000 cell sites, with Globe having 8,000.

Presidential Adviser for Economic Affairs and Information Technology Communications Ramon P. Jacinto has said the country needs 50,000 cell sites.

Incumbent telcos PLDT, Inc. and Globe have cited red tape as a barrier to building more cell sites.


source: http://bworldonline.com/globe-considers-...er-assets/
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Globe looks to secure more content partners

AYALA-LED Globe Telecom, Inc. is looking to secure deals with more content partners, as it launched a cybersecurity and intellectual property protection campaign.

Globe Chief Executive Officer Ernest L. Cu said the Ayala-led company will be stricter in protecting intellectual property as it reaches about one million broadband lines, beating its 2020 target.

“You know, Globe is partnered with some of the largest studios [like Fox, Disney and Netflix]. Netflix spend $6 billion to $8 billion in content every year. That content has to be protected,” he told reporters late Friday.

Globe’s latest content partner is Viu, known as a streaming site for Asian dramas and shows. Viu will be available to Globe users in April.

Mr. Cu said the telco is “very active and very aggressive [in] blocking of illegal sites.”

Globe reported it closed 2,471 sites that host malicious content such as child pornography last year.

“Globe is a big advocate of cyber security, a big advocate of using the Internet responsively,” Mr. Cu said. “We have many programs, [like] the digital thumbprint program, the grassroots program, to educate kids on how to use Internet.”

Mr. Cu said Globe will also be working on programs to address cyberbullying and fake news.

Aside from their digital and online content, Globe is also bullish on its virtual wallet service GCash as it continues to sign more deals with food and beverage merchants.

Globe reported its net profit dropped 5% to P15.08 billion in 2017 as “increased investments in data network pushed non-operating expenses and depreciation charges higher.”

Consolidated service revenues rose 6% to a record P127.9 billion in 2017.

“The sustained revenue momentum was driven by the solid growth in data-related products brought about by the increasing popularity of streaming and on demand video content,” Globe said. 


source: http://bworldonline.com/globe-looks-secu...-partners/
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