Digitel seeks transfer of PA to new unit

Gokongwei-owned Digital Telecommunications Phils. Inc. (Digitel) has sought approval from the National Telecommunications Commission (NTC) to transfer its provisional authority (PA) to engage in the cellular mobile telephone service (CMTS) business to its newly formed subsidiary Digitel Mobile Phils. Inc.

The STAR learned that Digitel also asked the NTC to approve the transfer of its cellular mobile network assets to the new company.

A series of public hearings will have to be conducted by the NTC to determine whether the proposed set-up is feasible and to find out if there are any oppositors to the application. "The conclusion of the public hearings and a decision on the matter can take a few days or can take months, depending on the number of oppositors," according to NTC common carriers accreditation department chief Edgardo Cabarrios.

The joint application filed by Digitel Mobile proposes the transfer of the former’s PA to engage in the CMTS business to the latter.

Digitel Mobile was earlier awarded a 25-year franchise to engage in the telecommunications business by President Arroyo. However, the new subsidiary still needs a PA from the NTC to operate a CMTS.

It was learned that because of the application, Digitel decided not to push through with the planned commercial launch of its CMTS operations supposedly last Feb. 1 and instead wait for the approval of the proposed transfer, which sources revealed is a condition set by Digitel’s creditors.

Another reason for postponing the planned launch indefinitely is the non-conclusion of negotiations with Globe Telecom for interconnection of their respective CMTS networks. However, Globe officials disclosed that if Digitel’s CMTS provisional authority is transferred to Digitel Mobile, other CMTS operators including Globe may ask for another set of negotiations for an interconnection agreement since Digitel Mobile is an entirely different entity from Digitel.

Digitel admitted that it may take a while before it can transfer its cellular operations to its new mobile telephone subsidiary.

In an interview with The STAR, Digitel president Lance Gogongwei said the company has to meet several requirements before it can transfer to newly formed Digitel Mobile the operations of its CMTS.

Gokongwei said they are now in the process of reviewing the various legal administrative requirements in order to transfer the mobile business to Digitel Mobile. Once the transfer is completed, Digitel will be focusing on the landline business while Digitel Mobile will handle the CMTS business.

According to the NTC, Digitel Mobile will have to acquire from parent Digitel the latter’s cellular mobile network and then secure a license from the NTC before it can operate the mobile phone business.

Since Digitel Mobile is 100 percent owned by Digitel, there will be no use securing a separate PA to operate a cellular business.

"It is Digitel which has the PA. It cannot just transfer to Digital Mobile the license without getting approval from the NTC and selling its CMTS network to the new subsidiary," Cabarrios explained.

Industry sources said Digitel had to form a new subsidiary that will handle the CMTS business because of conditions imposed by creditors and suppliers that the mobile operations should be made separate and distinct from that of the problem-plagued landline business.