One of the obvious reasons why we trail behind is the archipelagic nature of our country. There are so many islands to traverse and connect.
This disadvantage has doubled, and even trebled, costs for local telecommunications firms to build the needed infrastructure compared to the contiguous land mass of Thailand and Vietnam.
Although somewhat eased now with the passage of Bayanihan Act 2 (RA 11494) and the Joint Memorandum Circular 1 series of 2021 — which now limits the number of needed permits to 14 from the previous average of 29, and cut down the approval process from nine months to four — the permitting challenge and the right of way issues for building cell sites are still there.
Local government units (LGUs) continue to impose roadblocks, which are prompting telcos to seek redress from the Anti-Red Tape Authority.
One of the obvious reasons why we trail behind is the archipelagic nature of our country. There are so many islands to traverse and connect.
This disadvantage has doubled, and even trebled, costs for local telecommunications firms to build the needed infrastructure compared to the contiguous land mass of Thailand and Vietnam.
Although somewhat eased now with the passage of Bayanihan Act 2 (RA 11494) and the Joint Memorandum Circular 1 series of 2021 — which now limits the number of needed permits to 14 from the previous average of 29, and cut down the approval process from nine months to four — the permitting challenge and the right of way issues for building cell sites are still there.
Local government units (LGUs) continue to impose roadblocks, which are prompting telcos to seek redress from the Anti-Red Tape Authority.
While the three mobile companies in Vietnam are owned by the government (which makes the cell site building easier and cheaper), the Thai government has afforded their telcos with enough support and subsidies.
Philippines telcos still hobbled
Meanwhile, it is the fate of Philippine mobile companies to be bound by their respective franchises which contain the provisions of their obligations to roll out and entirely finance by themselves the coverage and capacity of services.
Legislative franchises are, by its nature, a contract with the government and the mobile companies have agreed and accepted these franchises and their conditions.
While Philippine mobile companies have tax exemptions from import duties of their radio equipment and exemption from property taxes directly related to their business, they still pay heavily for spectrum use, as well as for supervision and regulation fees. The last two fees, in particular, far outweigh the benefits that telcos enjoy on their other exemptions.
It may be argued that telcos do have an Ebitda (earnings before interest, taxes, depreciation, and amortization) margin close to 50% from its operations. Still the revenues they generate are plowed back to its intensive capital budget the following year.
Coming now from the experience of telcos in Thailand and Vietnam, it is imperative that cell sites and other telco infrastructure should not just be left to the responsibility of telcos.
Government intervention needed
The provisions of telecommunications services are so vital to our nation’s development that the government and all sectors of the country must support this.
To solve the perennial issue of permit and right-of-way issue, it has been suggested that just like in certain countries, the government should be the one to build the cell sites and other telecommunications facilities which in turn will be leased by the telcos as a way for the state to claw back taxpayers’ money.
Former Senate President Franklin Drilon said in 2020, “I concur with the proposition that the government should fund the construction of cell towers and rent them to telco companies.”
The Department of Information and Communication Technology (DICT) recently released a policy that will allow the entry of Independent Tower Companies (ITCs) designed to address the issue of fast-tracking the rollout of cell sites.
While telcos would remain focus on radio capacity builds, the ITCs will focus on the passive structures for which these radios will be installed.
Yet, these ITCs continue to experience what the telcos faced in building their infrastructure. The same challenges of permitting and right of way issues continue to hound them.
Though it may take a lot of political guts to do this, the government should amend pertinent laws particularly the Local Government Code to limit the regulations of telco infrastructure to the national government. The bulk of the red tape is coming from the LGUs.
Connecting the fringes
The government should not stop with the ITCs. The government should build telecom infrastructure in the so-called geographically isolated and disadvantaged areas (GIDAs), and lease the same to the telcos to recover its cost.
This may be in the form of submarine cable systems to reach island provinces like Batanes, Basilan, Sulu and Tai-Tawi, or cell sites in remote areas of the country.
“As the most recent World Bank Report in April 2022 showed, digital connectivity and all that it brings has undoubtedly revolutionized the way most of us communicate and interact, driving social and economic development in many different ways,” it is said in the report Connectivity: Why Being Connected is Crucial to us All.
This is what the telcos need right now from the government. We may not be able to surpass our neighbors, Thailand and Vietnam, when it comes to telco infrastructure, but taking aside all these metrics, what is important is that we will be able to provide decent connectivity to all.
As I earlier pointed out in my previous article, access to internet is now a human right.
This opinion column represents the personal views of the author, and not necessarily those of his employer or InsiderPH News.
General Counsel of the Globe Group and president of the Philippine Chamber of Telecommunications Operators
