Truly, internet connectivity has evolved into a human right.
Though initially taken in the context of a right against the state in interfering or blocking contents on the net, still, this right has evolved to include the right of an individual to have a stable and reliable internet service.
Internet as a human right is also now being espoused by telcos around the world against states and the communities in general to eliminate regulatory roadblocks, provide subsidies and enact legislations and ordinances that will support their infra and finance builds.
Connectivity has become an essential utility in this day and age in the same category as electricity and water. Connectivity has transformed lives and nations, and in fact, “data” — the fulcrum of today’s connectivity — is “the new oil” (Clive Humby).
If such were so here in the case of the Philippines, why then are telcos being demanded to pay rentals when electric and water utilities are not? Telco services are now on equal footing with that of electricity and water.
It is understandable that landowners of cell sites, given its size and intrusion to the land, may rightfully demand a reasonable rent. It is different, though, for commercial, office establishments and condos which may only require a telco room in the building, and indoor base stations about the same as that of CCTV cameras in the hallways. Telcos do provide service to their customers and users which enable the latter to enjoy their facilities even better.
Telcos are now lobbying Congress to enact a no-lease policy legislation that will mandate real estate developers to reserve a space for ICT in all newly developed and existing projects (PDI, Feb. 25, 2024), just like in electric and water utilities.
Stratbase Institute stressed that adopting such a rule in legislation is important ‘since digital connectivity is now an indispensable utility that should be accessible to all and integral to the design of every residential and commercial development project’. (PDI, Feb. 24, 2024).
I understand that the telcos will bring this matter to the attention of President Marcos in the days to come and, given the digital mind-set of the President, this idea may see the light of day.
Telcos around the world are experiencing revenue downtrends and the Philippine telcos are no exception with low single-digit growths. However, capex and opex continue to rise on this capital-intensive industry and data-hungry customer base, further putting pressure on growth prospects in the coming years. This will create tension and delays in the infra builds that will affect service to the public.
Of course, the rentals being paid to real estate developers, equivalent to hundreds of millions of pesos every year, are better off spent on telco infra to build capacity and coverage.
The telcos are in the midst of negotiations with the developers for a no-lease policy as of this moment. On the part of the establishment owners, these rentals are already part of the key performance indicators and sales targets of the developers and yielding to this will definitely affect this. However, telcos are bringing to the table certain digital services in lieu of rentals that may prove important and relevant to certain establishments, like the development of a digital parking system for malls and commercial establishments, and digital security systems for condominiums. Thus, developers will not be left empty-handed with the provisions of digital services in store for them. Telcos believe that this will just be a glide-path though, as eventually, both telcos and developers will have to agree to a pure zero-rated hospitality in the latter’s establishments.
What is to be avoided here is a stand-off; a shopping mall without cellular signal; an office without broadband; a condo or a house without wi-fi. Anyway, at the end of the day, both parties will realize the importance of each other to their respective businesses. Omnia Bene Erunt. “All things will be well”.
(Atty. Castelo is the Group General Counsel of the Globe Group and the President of the Philippine Chamber of Telecommunications Operators. Froi loves to play golf, and is a doting grandfather to Leandro)
Atty. Castelo is the Group General Counsel of the Globe Group and the president of the Philippine Chamber of Telecommunications Operators.
