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Sunday, December 10, 2023

Common Towers: Sharing the costs, spreading telecom’s services further

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IN a nation composed of thousands of islands and characterized by a challenging topography, the Philippines has long faced a unique and pervasive problem – delivering reliable and accessible telecommunications services to all its citizens. 

Connectivity is the lifeblood of modern society. It empowers individuals, drives economic growth, and facilitates access to essential services and opportunities. In today’s world, being connected is not just about convenience; it is a fundamental necessity. 

However, for the Philippines, a nation characterized by thousands of islands, mountains, and diverse landscapes, ensuring seamless connectivity has been a challenging endeavor. 

In an age where being connected is not merely a convenience but a necessity, the Philippines found itself falling short for many years due to a lower tower density compared to neighboring countries, ultimately hampering the ability of telecommunications companies to meet the surging demand for mobile internet services.

Until recently, the Philippines had not fully embraced the concept of sharing telecommunications infrastructure. 

It has since recognized that to address the connectivity gap and truly usher the nation into the digital age, a paradigm shift is necessary. The answer lies in the Common Towers Program, which essentially encouraged telecommunications providers to share infrastructure to serve more subscribers and improve their services.

This program represents not only a significant shift in the nation’s approach to telecommunications infrastructure but also a promise to revolutionize the telecommunications landscape for the better.

Why share? 

A PRACTICE in other countries, infrastructure sharing is a sound business practice that can lead to improved services, wider coverage, and more competitive pricing, making it a win-win for both telecommunication companies and their customers.

Building and maintaining telecommunication infrastructure, such as cell towers, is a capital-intensive endeavor. By sharing these resources, telecom companies can significantly reduce their capital expenditures (capex). 

And when costs are lowered, companies can allocate more resources to improving the quality of services and expanding their network reach, ultimately benefiting subscribers both in terms of service and pricing.

It also allows for faster deployment, as instead of each telecom company individually securing permits, acquiring land, and constructing towers, they can utilize existing structures.

Furthermore, infrastructure sharing introduces healthy competition among telecommunication companies. When multiple service providers have access to the same infrastructure, are driven to innovate and continually improve their offerings. 

These are some of the benefits that the Department of Information and Communications Technology (DICT) listed, when it first introduced the idea in 2019. 

The program went off to a rocky start with issues on politicking and regulatory constraints related to permitting hounding the program. But the pandemic pushed the government to formally implement it, especially since the new administration’s economic thrust is hinged on digital transformation. 

The initiative is seen to transform the nation’s telecommunications landscape, a move welcomed by industry leaders and the government alike.

Rooted in advancing digital lives

GLOBE Telecom Inc. VP for Corporate Finance Carlo Puno said the company’s motivation to participate in the initiative is deeply rooted in a commitment to advancing the digital lives of Filipinos. 

“The common tower initiative helps fast track the buildout of IT infrastructure and increase the number of towers in the country. The participation of independent tower companies will result in lower capex on the operator’s side, and boost network coverage and improve service quality on the customer’s side, benefitting all parties involved,” Puno explained. 

He noted that this policy serves as a monetization effort that uplifts Globe’s overall value and supports the company’s goal of enabling the digital lives of Filipinos.

PLDT Inc. is equally enthusiastic about the Common Towers Program, saying that it is committed to driving the government’s digital transformation agenda, in alignment with their participation in the Digital Infrastructure group of the Government’s Private Sector Advisory Council.

For his part, Dito Telecommunity Corp. CTO Rodolfo Santiago said the third telco player’s participation in the program hinged on the idea of collaborating with Independent Tower Companies (ITCs) to speed up its infrastructure build. 

Aside from encouraging telcos to share their own infrastructure, the program also called for ITCs to build and develop their own towers that telcos could rent all at the same time. 

This led to the launch of several ITCs in the country, supported by both Filipino infrastructure conglomerates, power companies, and foreign tower providers. This also presented Globe and PLDT an opportunity to monetize their assets, selling a part of tower portfolios to the ITCs and leasing them back after the deal. 

Collaboration is key 

THE Common Towers Program, although transformative, is not without its challenges. 

According to Puno, this program brings anticipated challenges, including operational adjustments and transitioning to a new business model. However, it also provides an opportunity for Globe to review its existing framework and identify areas where processes can be enhanced and fully leveraged with the operational expertise of the tower company partners.

He explained that equitable access to telecom services in rural and underserved areas is also a key part of Globe’s strategy. The company continues to invest heavily in its Philippine network. 

The program has reinforced these efforts by minimizing unnecessary spending, particularly through the reduction of network duplication, and accelerating tower deployment through partnerships with leading global tower companies.

“In the past three years, Globe incurred relatively higher levels of capital expenditures, a bulk of which was allocated to further improve data and network infrastructure geared toward enhancing mobile and internet experiences for more Filipinos,” Puno emphasized. 

For its part, PLDT said it views the challenges as opportunities to drive significant efficiencies and improved connectivity that will benefit all Filipinos. 

“Collaboration with partner tower companies presents an opportunity for the PLDT Group to usher in global best practices and technologies in operating the towers in the Philippines, contributing to better network quality, higher resilience and faster recovery from typhoons and other natural calamities,” the company said. 

This approach is expected to enhance network quality, increase resilience, and expedite recovery from natural calamities, a crucial aspect for a nation frequently impacted by typhoons and other disasters.

Meanwhile, Santiago noted that Dito is also beefing up its partnership with tower companies, as they have now acquired a substantial number of towers.

“We have considered and are going to use more of these towers to save on capex and time to service,” he said. 

Step toward connectivity

WITH its benefits to both consumers and telcos, one could argue that the Common Tower Program is not just an initiative, but a mission to reshape the nation’s telecommunications landscape for the better. 

With major telecom players like Globe, PLDT, and Dito, and the support of the government, this initiative is expected to bridge the connectivity divide that has persisted for far too long. It is a step towards a more connected, inclusive, and digitally empowered Philippines.

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