Digitel ready to spend $200 M for cellphone operations

The Gokongwei-owned Digital Telecommunications Philippines Inc. (Digitel) is ready to spend $150 million to $200 million for its cellular phone operations once its long-pending application is approved by the National Telecommunications Commission. (NTC).

Digitel senior vice president for legal affairs William Pamintuan said over the weekend that the company is looking at an initial subscriber base of about 150,000 although they would accommodate up to 500,000 subscribers in the first year of operations.

Pamintuan said 85 percent of the allocated amount will be from supplier credit while the rest will be internally-generated.

Although Digitel is still facing strong opposition from Express Telecom, Pamintuan is confident that they will soon receive the provisional authority (PA) to offer cellular services in view of a recent NTC approval on a similar application filed by Bayan Telecommunications, Inc (Bayantel). BayanTel owns 46.6 percent of Express Telecom.

The 20 Megahertz reallocated radio frequency spectrum of the NTC will still allow the entry of another player aside from BayanTel.

Pamintuan, likewise, pointed out that the highly competitive industry can accommodate one more operator in its fold in view of recent mergers and acquisitions.

There are mow effectively just three mobile phone players, namely: Globe Telecom together with its wholly-owned subsidiary Isla Communications Co. (Islacom), Smart Communications Inc. with its sister firm Pilipino Telephone Corp. and Express Telecom and newcomer BayanTel.

"They've been saying that the market is saturated ever since. But the truth is, on one has maintained a solid market leadership in the industry to this day. And now with all these mergers going on, the number of players has become smaller. I strongly believe there's still enough room for us," he explained.

Digitel is planning to utilize the highly-popular global system for mobile communications (GSM) digital technology already being deployed by all the operators except for Express Telecom.

Although Digitel's entry in the GSM arena is considered late, Pamintuan said that migration into third generation technology will not be very hard for the company.

"The real migration into the so-called 3G takes three to four years to officially take off for all carriers. Our timing's not that bad, (as) nobody has made the real big jump yet," he noted.

To attract subscribers, he said Digitel will bank on, and market, the reliability of its network and ensure that there will be no overloading or congestion as already being experienced by Globe and Smart.

Digitel has filed a request for a PA in 1996 but even with the slow action of the commission on its application, the company is still willing to wait, he said.

"The cellular industry is on its boom stages. In five to six years, if we get our license, the revenues from our cellular operations could overtake that of our wireless service," he said.