PLDT to surrender CURE frequencies at no charge

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Optical fibre cables of Telecom Italia are seen in a telephone exchange in Rome, Italy December 20, 2013. -- REUTERS

PLDT, Inc. has agreed to the government’s plan to assign frequencies held by Connectivity Unlimited Resource Enterprise (CURE) to the telecom industry’s “third player” for no compensation.

The acting Secretary of the Department of Information and Communications Technology (DICT), Eliseo M. Rio, Jr., said in a social media post that the telecommunications company has agreed to not receive any “compensation” for the surrender of the 10 MHz band, used in third-generation (3G) mobile services.

The frequency held by PLDT unit CURE was to be divested as a condition of National Telecommunications Commission (NTC) approval of the PLDT merger with Digitel Telecommunications Philippines, Inc. in 2011. NTC was supposed to auction the asset but failed to do so.

President Rodrigo R. Duterte said yesterday that the government will not pay for the frequency.

“After talking with MVP [PLDT President and Chairman Manuel V. Pangilinan] yesterday, PLDT will return the CURE frequencies at absolutely no cost, that can now be awarded to the New Major Telco Player (NMTP), as per instruction of [President Duterte],” Mr. Rio said in his social media post.

Mr. Pangilinan confirmed the statement of Mr. Rio and said PLDT will notify the NTC next week. He is currently overseas on business.

“Next week, we will write to NTC regarding our waiver of the right to reimbursement re CURE frequency,” Mr. Pangilinan said in a text message.

Presidential Spokesperson Herminio L. Roque, Jr. said on Tuesday that Mr. Duterte was “displeased” with the prospect of having to pay for the CURE frequencies, which were awarded to telcos for free after a “beauty contest” to allocate frequencies.

NTC Deputy Commissioner Edgardo Cabarios has said that the third player may have to pay P3 billion for the CURE frequencies. Mr. Pangilinan has told reporters that P3 billion is “a good price.”

The government plans to award the remaining available frequencies, to the third player, allowing the new entrant to compete with incumbents PLDT and Globe Telecom, Inc.

Mr. Rio said that the 3G frequency bands were awarded via “beauty contest” by the NTC in 2005. PLDT acquired the 15 MHz band, Globe Telecom, Inc. 10 MHz, Sun Cellular (Digitel) 10 MHz, and CURE, 10 MHz.

In 2007, PLDT bought CURE and operated the telco using the brand name RED Mobile. In 2011, PLDT filed for approval of its acquisition of Digitel.

“When Smart/PLDT bought Sun… it did not violate any law because there is no Anti-Trust Law in the Philippines. But the NTC was of the opinion that holding 35 MHz of 55 Mhz of the 3G frequency is too much for one telco group to hold,” Mr. Rio recounted in his post.

Mr. Rio said the government then chose the “middle ground” of compelling PLDT to divest its interest in CURE to secure NTC approval for the Digitel acquisition.

He added that without the government having legal authority at the time to require divestment, PLDT had to write a letter to the NTC indicating its voluntary divestment of CURE.

This latest development is part of the efforts of the government to facilitate the entry of a third telco player.

Around three consortia are being formed by local firms.

Mr. Roque also announced on Tuesday that Mr. Duterte rejected the request of DICT to extend the timeline for selection of a third player to May instead of March, as companies have requested more time to prepare for the selection.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Patrizia Paola C. Marcelo