Gov’t eases rules of proposed ‘common tower policy’

The Duterte administration has decided to ease the proposed rules on the “common tower” policy and is now allowing telecom companies to build their own towers if an accredited tower builder is not about to fulfill the requirements.

It was previously announced that telecommunications companies will no longer be allowed to build communication towers and instead lease the structures from a tower company.

“If they want to build the tower in a certain location, let’s say Globe or Smart, and the common tower company does not respond in 30 days, they can build their own tower,” Presidential Adviser on Economic Affairs and Information Technology Communications Ramon Jacinto said in a press conference in Makati City on Thursday.

“So it’s not that absolutely they cannot. When the common tower company cannot fulfill their needs, they can. So it’s really fair,” Jacinto said.

This is a “triggering mechanism”—to build—as the common tower company will be at the mercy of existing telcos in the sense that they will be mandated to build a tower upon receiving a telco’s request.

“We are not here to hamper their business...” Jacinto said.

Stakeholders are concerned about their right to build their own infrastructure under their congressional franchise, Department of Information and Communications Technology (DICT) Acting Secretary Eliseo Rio said.

“Their main legal position is that in their franchise it was stated in there their right to build their own infrastructure ... So that one would be ... a contentious issue. But we can come up with an agreement that actually they need ... common towers,” Rio said in same briefing.

The draft guidelines will undergo due process and public consultations.

The policy is targeted to be implemented in the first quarter of 2019, Jacinto noted.

Once the policy is in place, the government will accredit up to two tower companies, with the accredited builders and the telcos having a six-month consultative review and start building towers.

“If you accredit too many at the start, it will not be competitive and they might not survive,” Jacinto said.

To make the initiative viable and sustainable, only two builders will be accredited for at least seven year before other companies can come in.

During those seven years, the companies must build 50,000 towers in order for the telcos to provide adequate network service across the country.

Companies interested to be an accredited tower builder must have a net worth of at least P10 billion and be able to raise as much as $2 billion or more than P100 million during the seven-year period so as not to hinder the progress of rolling out telecommunications towers.

Compared with 25,000 towers in Malaysia and 90,000 in Indonesia, the Philippines has only 16,000 towers, according to DICT.

Rio said the policy will free telcos from costly operating expenses and hindrances in building cell sites, including obtaining land and permits, maintaining the structures.

“Right now, Globe and Smart are building their own towers, and they use capex every year. They have budgeted some capital expenditure for towers. They have to maintain it, put electricity ...” he said.

“In a shared tower, they only have to deal with operational expenses, they just lease these towers. So it becomes more predictable, more easily planned.”

The initial policy guidelines placed no limits on ownership structure and foreigner investors may own up to 100 percent of the tower company.

“Since it is now going to be operating expense on the part of the telcos—they will in fact share with other telcos—they will not have to spend so much ... This will really make an impact on telecommunications services and make them cheaper,” Rio noted.

Jacinto said the tower companies will own the structure but not the land hosting the telecommunications tower.

Four to five foreign companies are currently interested in going into the tower-making  business.

“We will look at the interested who would like to be the common tower provider. It can be first come, first served, or unsolicited proposal, subject to a Swiss challenge ...” Rio noted.

“The government will not spend for this. This will be a private activity,” he said.
—VDS, GMA News