DICT’s Rio Says Deals With Tower Firms Could Top USD 6 Billion

Department of Information and Communications Technology (DICT) Secretary Eliseo M. Rio Jr. said his group has so far signed four common tower deals, and another one is set to be struck, and yet one more is scheduled.

The zeal in forging several deals could, however, pit Rio further against presidential adviser Ramon P. Jacinto, who has been insisting on a common tower policy limited to just two players.

The ICT chief said these deals will aid the government in drafting the common tower policy— something that has been ongoing for roughly two years now.

“This will help in coming up with the final policy, which I will not sign if it will limit the number of tower companies to two,” Rio said.

“Imagine, each of these six will invest an average of USD 1 billion each, so that’s about USD 6 billion at the very least,” he told the BusinessMirror in an interview.

These investments mainly for the construction of telco towers will also lead to job creation, he said.

“They will also free up the capital expenditures of telcos, which currently build their own towers. And so, with a freed-up capital, telcos can now use the capital to buy radios that transit signal and improve their networks,” Rio explained.

Thursday saw Rio leading the signing of memorandums of understanding with IHS Towers—the largest mobile telecommunications infrastructure provider in Africa, Europe and the Middle East by tower count—and Edotco, a Malaysian tower company that also has operations in Bangladesh, Cambodia, Sri Lanka, Myanmar and Pakistan.

It has signed two other deals with Isoc Infrastructure, a Filipino company that previously submitted an unsolicited proposal to the ICT department for the development of telco infrastructure across the country, and Singaporean company iSON Towers, which has operations in the Middle East, the Asean and Africa.

“Next we will sign another one with American Towers,” Rio added. “That’s a total of six—and they are not just any other tower company, but they are top tower companies globally.”

He explained that signing these agreements with the tower companies will help the Philippines improve its telco services.

Telco towers—infrastructure where radio transmitters are housed—remain inadequate in the Philippines, with the country having one of the lowest tower density scores in Asia, based on data from TowerXchange.

“We badly need more towers, and the more tower companies who will be allowed to build will be better for us. These are new investments and will lead job to creation,” he said.

The Philippines has about 19,000 towers spread across the archipelago. However, these are not enough to meet the demand for quality service, which requires the country to have about 75,000 towers.

The main culprit behind this inadequacy, at least according to telco officials, is the bureaucratic red tape for permits.

2 tower providers cap shunned

Rio noted that his office veered away from the proposed common tower policy—limiting the players to two providers—as having multiple infrastructure builders and operators is a common practice in neighboring nations.

“In other countries, there are about 10 tower companies. Other have around four. So we are in the median.

Indonesia, an archipelago like the Philippines, has about 50 tower companies that have 100,000 towers in total—and they are all viable,” Rio said.

He explained that to make it economically viable for each company to operate, the memorandums of understanding are the “same for all in terms of wording.”

“We made sure that the playing fields are level,” Rio said. “We will let market forces such as competition dictate the viability.”

The draft policy, being championed by ICT Adviser to President Jacinto, essentially limits the number of tower providers in the Philippines to two, citing commercial viability issues.

Likewise, the proposed policy will essentially infringe on the capability of telcos to build their own infrastructure, as tower companies will have the first dibs on the construction of infrastructure.

However, telcos will have the option to build their own towers, should the tower company refuses to build an infrastructure in an area identified by the telcos.

“Will the next ICT secretary be supportive of this proposal and fight the industry stakeholders for Jacinto?” is what Rio is wondering about.

Sen. Gregorio B. Honasan II is expected to replace Rio as ICT chief anytime soon.―Business Mirror