Razon-led group mulls entry into mobile phone business

A group identified with businessman Enrique Razon of cargo handling firm International Container Terminal Services Inc. (ICSTI) is eyeing to venture into mobile telephony service, highly placed sources told the STAR.

Razon, together with former Home Cable executive Tritz Server, has acquired Multi-Media Telephone Inc. from the De Venecia family. Multi-Media is applying with the National Telecommunications Commission (NTC) for a license to engage in mobile telephony using the third-generation (3G) mobile technology.

There are also rumors that the Concepcion family is joining the venture, but sources clarified that Server is just related to the Concepcions by marriage (he is related to Marivic Araneta-Concepcion, wife of Jose Concepcion Jr.)

Multi-Media will be competing with AZ Communications, a company identified with businessman Antonio ‘Tonyboy’ Cojuangco for one of five 3G licenses and frequencies that will be issued by NTC.

Other competitors are existing players Smart Communications, Globe Telecom and Digitel, as well as new potential entrants into the highly competitive world of mobile telephony which include CURE, reportedly owned by former Trade Minister Roberto Ongpin who owns listed information technology company ISM Communications. ISM is trying to acquire a majority stake in Eastern Telecommunications Phils. Inc. (ETPI) and is reportedly eyeing Extelcom, which holds a mobile telephony franchise.

Under the NTC rules, only those with congressional franchises can apply. It is not yet known which existing franchise holder will Cojuangco’s AZ Communications acquire. At present, Lopez-owned Bayan Telecommunications (Bayantel) is not yet utilizing its cellular mobile telephone service (CMTS) legislative franchise.

Another applicant is Next Mobile, controlled by the Velarde group. The said group recently acquired a controlling stake in Cashrounds and there are rumors that listed on-line financial matching firm Cashrounds will be used as a vehicle for the backdoor listing of Next Mobile, the country’s leading digital trunk radio service company.

The NTC hopes to award the 3G frequencies by early next year. NTC officials say they recognize that going into 3G will entail huge investments on the part of the operator (tens of billions of dollars at least for the new telcos) so that a stringent evaluation of the applicants’ financial capability will be conducted.

"It is not enough that they comply with the minimum paid-up capital requirement of an initial P100 million to be increased to P400 million. They also have to show proof such as letters of credit and other sources of financing that they are capable of putting up the necessary infrastructure,"an NTC official told the STAR.

The NTC said that 134 3G licenses have already been awarded across 48 countries, with 67 networks having launched commercial services.

The total number of 3G subscribers has reached 22 million worldwide, a 500 percent market growth in 2004 alone, with the Asia-Pacific region showing the strongest growth.