NTC may cancel 3G license of CURE

MANILA, Philippines - The National Telecommunications Commission (NTC) said yesterday the government may recall the third generation mobile communications technology (3G) frequency band and cancel the license granted to Connectivity Unlimited Resources Enterprise (CURE) in 2006 for failure to comply with its 3G commitments.

NTC deputy commissioner Douglas Michael Mallillin said the commission is studying the possibility of recalling CURE’s 3G license and frequency band for failure to roll out 3G services within the period required.

Under NTC Memorandum Circular 07-08-2005, grantees of 3G licenses and frequency bandwidths are required not only to begin the installation and construction of the 3G network and facilities not later than 12 months from date of award but also to start commercial operation not later than 30 months, also from award date.

The same circular provides that failure of 3G network operators to comply with any of the obligations specified in the MC shall be a cause for the cancellation of their authority to provide 3G services, and for the recall of the assigned 3G radio frequency bands.

The NTC in early 2006 granted 3G licenses and frequencies to Smart Communications, Globe Telecom, Digital Telecommunications Philippines Inc., and CURE, then owned by businessman Roberto ‘Bobby’ Ongpin.

Two years later or in April 2008, Smart acquired the entire issued and outstanding capital stock of PH Communications Holdings Corp. and Francom Holdings Inc., which collectively own 100 percent of CURE, for P419.5 million ($10 million) as part of its plan to expand and upgrade broadband services.

According to Mallillin, CURE, which holds 10 megahertz of 3G frequency, never rolled out its 3G network.

He pointed out that part of the requirement imposed on CURE and other 3G licensees is that they cover at least 80 percent of the provincial capital towns/cities and 80 percent of the chartered cities over a five-year period.

“We will notify them (CURE) and give them a show-cause order why it should not be sanctioned for its failure to roll out,” Mallillin said.

He said a review will be undertaken by the NTC next year to check if other telecom firms complied with their 3G roll-out plans.

Mallillin added that Smart, as the new owner of CURE, has requested the commission that it be allowed to use CURE’s frequency.

However, he noted that the transfer to Smart of the 3G frequency assigned to CURE has not yet been approved, which means the responsibility of rolling out the service is still with CURE.

He added that the memorandum of agreement between Smart and CURE only states that the latter can use Smart’s network and frequency and not the other way around.

Smart has 35 Mhz of 3G frequency, including its own 15 Mhz, Cure’s 10 Mhz and Pilipino Telephone Corp.’s 10 Mhz, while Globe and Digitel have 10 Mhz of 3G frequency each.

Last week, the NTC issued rules governing the auction for the last 3G frequency at a minimum bid price of P65 million. The new 3G rules require the interested telecom firms to have a company net worth of at least P3 billion and to put up a performance bond equivalent to 30 percent of the roll out cost for the first two years or P1 billion, whichever is higher.