Next Mobile gets CMTS license

The National Telecommunications Commission (NTC) has finally granted leading digital trunk radio operator Next Mobile Inc. (NMI) authority to engage in cellular mobile telephone system (CMTS) services.

Observers said this will enable Next Mobile to interconnect its text messaging services with existing CMTS operators Smart Communications, Globe Telecom, and Digitel Mobile and enjoy preferential cellular voice charges when calling from the Next Mobile network to other CMTS operators and vice versa.

In an order issued last Dec. 29, the NTC said NMI is granted provisional authority to install, operate and maintain a mobile telecommunications system, offer services, and to charge rates subject to such terms and conditions set out in a separate order to be issued by the commission.

Next Mobile chief technology officer Henrik Nyqvist said: "Our technology now is 2.5G (general packet radio service or GPRS) and we can easily upgrade to 3G (third generation mobile communications technology) faster than any of the new entrants who all have no current operations in mobile voice communications."

Mel Velarde, CEO of Next Mobile and listed firm Cashrounds, said: "We truly appreciate the present NTC leadership for this new license in recognition of Next Mobile’s long years of service as a mobile telecommunications company. With this license, Next Mobile’s dominant leadership in the trunked-radio business can now extend to other key market segments that value the superiority of our technologies and the uniqueness of our products and services. We can compete with the big telcos by being narrow minded in choosing the market niches where we think we can win."

Next Mobile is currently authorized under a legislative franchise to construct, establish, operate and maintain within and without the Philippines for commercial purposes and in the public interest, radio systems, cellular phone systems, personal communications networks, trunked radio systems, and any other means or systems similar or related to the foregoing, now existing or that which may be developed by modern technology, and to install, and operate corresponding radio transmitting and receiving stations and communications facilities at such places in or outside the Philippines.

It is also the sole authorized operator of a trunked radio dispatch communications system utilizing the Integrated Digital Enhanced Network (IDEN) , which is classified as a 2.5 G technology. It has a network of 139 base stations and a footprint covering Metro Manila and Southern Luzon from Pampanga to Batangas, as well as Baguio.

In its submissions to the NTC, Next Mobile projects that in five years’ time, its subscriber base would be 1.1 million, which is 3.33 percent of the estimated population. Its subscriber forecast by the end of 2012 will be 11.7 million, which translates to a seven percent share in the wireless market. It has an authorized capital stock of more than P3 billion. Of the said authorized capital, more than P1 billion has been subscribed and paid-up.

Next Mobile is in the final stages of capital restructuring designed to wipe out the deficit in the books of the corporation. The said restructuring has been approved by the stockholders, and is currently awaiting final approval by the Securities and Exchange Commission (SEC).

The company has total assets of more than P2.45 billion and total liabilities of P402.76 million for a net worth of P2.05 billion. It has a debt-to-equity ratio of 20:80.

NTC’s order granting Next Mobile full CMTS status was contained in its consolidated decision which granted 3G frequencies to Smart, Globe, Digitel Mobile, and Connectivity Unlimited Resource Enterprise (CURE). There are reports that CURE has tied up with ISM Communications identified with former trade minister Roberto Ongpin which recently acquired majority control of Eastern Telecommunications Phils. Inc. (ETPI).

Since five frequencies are supposed to be assigned and only four applicants qualified as frequency assignees, the NTC said it will hold the assignment of the remaining portion of the bandwidth, specifically, 1965-1980 MHz, in abeyance until after an applicant for the assignment shall have qualified in accordance with the criteria prescribed by the NTC.

The NTC denied the application of AZ Communications Network, a company owned by businessman Antonio Cojuangco, for 3G frequencies for failure to build up the financial capability to undertake 3G operations and to raise the P400 million initial paid stockholders‚ equity. "This is a mandatory requirement of MC-07-08-2005, and having failed in that aspect it cannot be counted on to be financially capable to undertake the more expensive obligation of 3G installation and operation," the NTC said. The commission cited the same in its decision denying the application of Pacific Wireless.

Smart, Globe, Digitel, CURE, Bayantel and Multimedia Telephony, Inc.(MTI), all considered existing duly authorized CMTS service providers, were considered prequalified to apply for 3G frequencies. Of the non-CMTS service provider applicants (Next Mobile, AZ Communications, and Pacific Wireless), only Next Mobile was considered a qualified applicant.

In disposing of Next Mobile’s application for a 3G frequency, the NTC order did not state that the company was not qualified as a 3G frequency assignee.

The commission said Next Mobile’s proposal to cover 90 percent of the provincial capital towns/cities and 85 percent of the chartered cities and to use frequencies within the bands 825-845MHz paired with 870-890MHz or other frequencies appropriate for the CDMA2000 3G standard "appears to be technically feasible."

As for the financial evaluation, the NTC said that based on the financial documents submitted, Next Mobile has fully complied with the requirements under Sec. 3.3c of MC No. 07-08-2005.

"In view of the foregoing, Next Mobile is hereby granted provisional authority to install, operate and maintain a mobile telecommunications system, offer services, and to charge rates therefor subject to such terms and conditions set out in a separate order to be issued by the commission, with the clarification that this provisional authority is not specific to 3G and is without prejudice to further evaluation under the criteria and requirements set forth in Sec. 3.6, 3.8, and 5 of MC No. 07-08-2005 for the determination of applicants qualified for the assignment of the allocated frequencies for 3G," the NTC pointed out in its order.

Both CURE and Next Mobile were given licenses for mobile telecommunications system not specific to 3G, but in the case of CURE, it was able to secure a 3G frequency. "In the case of Next Mobile, it’s like owning a plane and getting a license to fly but no route or flight path yet," observers noted.

While not being able to secure a 3G frequency yet, Next Mobile officials said the decision of the NTC granting it full CMTS provider status is a welcome development. Insiders revealed that the company is hopeful that it will get the last remaining 3G bandwidth still up for grabs.