SEC okays Digitel capital hike to P3.8B

The Securities and Exchange Commission (SEC) has approved the plan of Digitel Mobile Phils. Inc., the cellular unit of the Gokongwei group, to raise its authorized capital stock to P3.8 billion from only P100 million.

The capital hike is intended to cover the mobile phone firm’s network expansion program aimed at strengthening its capacity to accommodate as much as six million subscribers by yearend. Operating under the brand name Sun Cellular, Digitel Mobile has earmarked $200 million for its network expansion to compete with major rivals Smart and Globe.

Documents filed with the SEC show that of the P3.7-billion capital hike, P925 million has been subscribed and paid.

Sun Cellular’s subscriber base has been increasing dramatically since the network launched its pioneering 24/7 Call and Text Unlimited program in October last year. The groundbreaking service allows postpaid and prepaid subscribers to make local Sun-to-Sun calls and text messages at a low, fixed rate.

The unmatched value and convenience of this unlimited deal was a major attraction that prompted a multitude of subscribers to switch to Sun.

Sun Cellular has teamed up with three of the world’s biggest telecommunications companies – Hua Wei Technologies Inc., Ericsson and Alcatel to provide major network improvements in its existing network.

Hua Wei’s commitment involves the upgrading of and adding to existing main switching centers (MSCs), adding stand-alone switching transfer points (STPs) and transfer switches. A new core and additional bay station subsystem (BSS) will also be integrated into the network elements, while upgrading 90 percent of the existing base stations and adding 350 new cell sites and 13 new base station controllers (BSCs).

For the Visayas-Mindanao area, Sweden’s Ericsson will provide the network equipment, including the installation of a base station sub-system (switches and base stations), specifically to boost the network capacity in Metro Davao, Metro Cebu, Bacolod, Iloilo and Cagayan de Oro.

French vendor-partner, telecom giant Alcatel, on the other hand, will supply the network equipment for the entire Luzon area (particularly Baguio, Pampanga, Bulacan, Cavite, Laguna, Batangas) and all over the National Capital Region.

Analysts said the ongoing development program that aims to achieve the six million-subscriber capacity may be considered the fastest expansion project undertaken by a local mobile network after only two years of operation.

The network expansion in preparation for the anticipated volume of text messages, will make its text messaging center more robust in terms of switching capacity and reliability. The improvements shall also enable Sun Cellular to be ready to offer new and innovative value added service and other usage related services.