The Department of Information and Communications Technology (DICT) has proposed to limit the tower companies operating in the Philippines to at least seven firms, and intends to impose stringent technical and financial qualifications.
In the notice of consultation and submission on DICT’s rulemaking on the policy on shared passive ICT infrastructure common towers, Gregorio Honasan II, DICT secretary, asked all stakeholders – from government, academe and relevant industries – to give inputs and comments on the proposed policy standards, particularly on issues such as the number of tower companies, the financial and technical qualifications, among others.
All other provisions of the proposal submitted by the Office of the Presidential Adviser on Economic Affairs and Information Technology Communications and the May 2019 “Rules on the Accelerated Roll-Out of Common Towers in the Philippines” (RAROCTP) were used as proof of concept in the common tower draft rules.
The initial proposal is to limit the number of independent tower companies (ITCs) to not more than five in the first four years of implementation, to promote the viability of the policy and ensure high quality rollout consistent with protection of national security.
The proposal is to increase the number later to at least seven ITCs.
The RAROCTP had suggested to allow the market forces to determine the number of ITCs.
More than 24 companies have indicated interest to participate in the common tower initiative by signing a memorandum of understanding (MOU) with the DICT.
However, the DICT plans to abolish the ITCs’ accreditation made through MOUs and memorandum of agreement (MOA).
“An alternative would be to require registration with the DICT instead of an MOU and MOA, which is akin to the usual processes utilized by other departments and regulatory agencies relative to their respective regulated industries,” Honasan said.
“The department is leaning towards providing for registration requirements for the players in the common tower industry it being more expedient than the more tedious process of contract reviews relative to MOUs and MOAs,” he added.
The DICT is also seeking comments on the proposed financial requirements wherein ITCs must have net worth of least P3 billion and/of P10 billion and show evidence they can raise additional capital from their consortium members.
“A registered ITC and/or any of its shareholders and affiliates must have a minimum net worth of at least P10 billion or be able to provide evidence that it has the ability to raise additional capital from consortium members to enable it to have a net worth of at least P10 billion,” the DICT said.
“The setting of the minimum amounts required to show financial capacity at least P10 billion or at least P3 billion. Third is the alternative of being able to provide adequate evidence of the company’s ability to raise additional capital would be to open up the financial qualifications in order to allow more providers, including local companies and firms the opportunity to participate in the PTTI (Passive Telecommunications Tower Infrastructure) pioneering sector,” it added.
On the technical qualifications, the DICT is asking for comments whether to require the consortium partners who hold at least 20 percent equity in the company or consortium to have at least five years of experience of constructing and or owning and/or operating a minimum of 1,000 towers or 5,000 towers.
“DICT invites all interested person and entities to submit their views, observation, explanation and justification on the foregoing and is open to considering inputs on possible alternatives to the foregoing policy options. Your written observations, inputs or comments will be highly appreciated by the Department and will be considered accordingly in finalizing its current draft of the policy on shared passive ICT infrastructure,” Honasan said.
As for the policy on shared towers, the DICT intends to refer to the towers as PTTI to cover all types of outdoor non-electronic telecommunications infrastructure or civil works and facilities auxiliary thereto used for mounting macro cell sites.
It said this aims to foster and encourage the birth of the shared telecommunications tower sector as a pioneering industry in the Philippines, in order to enhance wireless network coverage and quality of ICT services across the country, including the unserved and underserved areas.
The policy also intends to require mandated sharing of passive ICT infrastructure after more than 22 years after deregulation.
The Philippines still has one of the lowest tower density, with 16,300 towers servicing about 113 million subscribers and no clear indications of tower sharing on the part of the telecom players. The Philippines is currently ranked the lower 12th in terms of tower density in Asia considering its land and population.