Digitel unveils Sun Cellular

Gokongwei-owned Digital Telecommunications Phils. Inc. (Digitel) formally unveiled to the public yesterday its newest offering – Sun Cellular.

Sun Cellular is the GSM or digital mobile service offering of Digitel, for which the company has allocated P20 billion in investments this year.

Around P13 billion has already been spent for phases 1 and 2 of the cellular mobile telephone service (CMTS) operations. The third phase, which will be implemented before the end of the year, will cost another P7 billion.

President Arroyo, who was the guest of honor, made the inaugural ceremonial call from the site of the grand launch at the Manila Midtown Hotel to Joel Pacarro, a nurse working in Kuwait.

During her brief conversation with Pacarro, the President was informed that the situation in Kuwait was peaceful.

Also present during the launching was Gokongwei Group chairman emeritus John Gokongwei Jr., Digitel president Lance Gokongwei, JG Summit Holdings chairman James Go, Robinsons Department Store senior vice president Robina Gokongwei, National Telecommunications Commission (NTC) chief Armi Jane Borje, and Alcatel Asia Pacific president Ron Spithill, among others.

Digitel president and chief executive officer Lance Gokongwei revealed that they expect the cellular business to contribute the bulk of the company’s revenues in three years’ time. "We are projecting the mobile business to account for more than half of revenues by 2005-2006," he said.

For this year, the company expects cellular to account for 40 percent of revenues, and the rest, from the fixed line business. With the fixed line business generating around P5.5 to P6 billion, Digitel projects its GSM business to earn around P4 billion in the first year alone.

Digitel owns and operates the country’s second largest landline network, next only to the Philippine Long Distance Telephone Co. (PLDT). In terms of capital expenditure budget, the wireless business of Digitel got P20 billion this year, and the fixed line business, P1 billion.

According to Gokongwei, they expect their newest GSM offering to generate one million subscribers in the next 12 to 24 months. "If you compare the expected five to six million new cellular users every year, one million is still very small," he said.

He also disclosed that the venture is already fully funded so that they do not see a need for a foreign partner. "A foreign partner helps in the capital point of view. But we are already fully funded and we believe we can take care of the technical aspect on our own," Gokongwei said.

Phase 1 and 2 of Digitel’s GSM project was partly financed by a French export credit agency (ECA) in the amount of $98 million. "Since our supplier for the first two phases was Alcatel, it followed that a French company would finance it. As for Phase 3, we are already in the final stages and we expect to award the contract soon. Around half would probably be financed by an ECA," he revealed.

Right now, Sun Cellular has in excess of 400 cellsites which is expected to reach 1000 by yearend.

Gokongwei stressed that competition in the GSM business is not only good for the economy, but will also benefit consumers in terms of lower rates and better service.

Meanwhile, Digitel expects its cellular mobile phone service (CMTS) network to be fully interconnected with those of leading players Globe Telecom and Smart Communications within the month or before its commercial launching in early-April.

Digitel, which earlier signed a voice interconnection agreement with Globe, expects to sign another interconnection agreement with Globe, this time for text messaging, within the month. "We hope to have a similar agreement in place with Smart very soon," according to Digitel GSM business unit CEO Charles Lim.

Interconnection allows subscribers of Digitel’s mobile operations to be able to make a call, or text, subscribers of Globe or Smart, and vice-versa. Voice covers a separate interconnection agreement from text messaging.