Smart set to invest in 3G to enhance revenues

Philippine Long Distance Telephone Co. (PLDT), through its wholly owned subsidiary Smart Communications, will invest in the third generation of mobile communications technology or 3G as means of enhancing revenues in the near future.

PLDT president Napoleon Nazareno disclosed that Smart has also filed its application with the National Telecommunications Commission (NTC) for 3G frequency bands, although it was learned that Smart has yet to submit the necessary requirements to be eligible for such frequencies.

NTC is making available five 3G frequency bands and if there are more than five qualified applicants, the frequencies will be granted to the highest bidder. Right now, only Globe Telecom has submitted all the required documents, unlike Smart and Digitel which have only furnished the NTC a letter of intent to avail of the 3G frequencies.

Four companies namely Next Mobile, AZ Communications of businessman Antonio Cojuangco, Multi-Media Communications, and CURE reportedly in tandem with ISM Communications of former trade minister Roberto Ongpin, are applying for 3G licenses and only those which are granted such license will be eligible to bid for or be allocated 3G frequencies.

PLDT chairman Manuel Pangilinan said 3G is inevitable and is something which PLDT will have to embrace.

Nazareno, also president and CEO of Smart, for his part explained that the group is looking at all kinds of usage-enhancing services to encourage more usage of mobile phone services.

"Growing revenues will definitely be a challenge next year. 3G when it comes will enhance revenue and will be geared towards the higher-end market," he pointed out.

Aside from 3G, which will be an upgrade of the existing second-generation or GSM (global system for mobile communications) system being used by the mobile phone service operators, PLDT is also investing in wireless broadband technology which it hopes will generate revenues next year.

Last June, Smart launched its Wifi (wireless fidelity) service which as of end-September had 9,000 subscribers and is targeting the rural areas. "Together with Meridian’s 3,500 subscribers, we now have 12,500 wireless broadband subscribers and we are scaling up operations to meet increasing demand. We now are having 200 installations a day, closing in on DSL," Nazareno said. Smart earlier acquired Meridian Telekom as part of its strategy to enter the wireless broadband arena.

PLDT’s retail DSL (digital subscriber line) broadband now has 76,000 subscribers and is projecting to hit 100,000 by year-end. The Vibe dial-up Internet service has 370,000 subscribers.

Pangilinan likewise pointed out that the company will continue to build its next generation network (NGN) and invest in other new technologies in order to better position PLDT to develop new revenue streams while achieving greater efficiencies.

PLDT is transforming its network from purely copper-wire based or its legacy architecture to one that has an IP (Internet Protocol) core which can deliver both voice and data. Bulk of PLDT fixed line’s capital expenditure is for the upgrading of existing facilities to NGN.