Common tower providers see no threat from satellite firms

By Arjay L. Balinbin, Senior Reporter

SOME telecommunication tower companies operating in the Philippines said the entry of satellite firms into the local scene poses no threat to their business or to that of traditional telco providers, as the technology complements terrestrial connectivity, which does not reach many of the country’s remote areas.

“If you look at the geographical situation in the Philippines, some areas will be best served by satellite technology,” edotco Group Chief Executive Officer Adlan Tajudin told BusinessWorld in a recent interview.

“They complement us. We still need towers. It’s just that instead of transmitting the signal through microwave or through fiber, they transmit through satellite. I think it really, really complements us,” he added.

“Typically, that solution is for the rural areas. It helps in terms of accelerating rural coverage.”

Rahul Singh, country manager of Singapore-based iSON Tower Ltd. Inc., which is set to build digital infrastructure in the Philippines, said in an e-mailed reply to questions: “Well, the Philippines as a country needs 50,000 towers, fiber connectivity, high-speed voice and internet, and all telecom ecosystem players together are addressing these needs.”

“Typically, satellite connectivity companies coexist with traditional MNOs (mobile network operators)/tower companies, and are not considered to be a threat to traditional telecommunications operators as the service will serve roughly 3% to 4% of the customers that traditional providers find most difficult to reach,” he added.

“From ISON Tower perspective, we are committed to working with mobile network operators enabling voice and high-speed broadband internet for Philippine consumers.”

He noted that the company is rolling out tower sites in Mindanao and the Visayas to enable voice and high-speed internet along with telecom operators.

Alliance Towers Corp. President and Chief Operating Officer Alvin D. Tolentino said the entry of foreign satellite companies into the Philippines will be “good for the economy,” as local telecommunications providers will be forced to keep up.

“It’s a question of scale. If you are just serving one barangay on a remote island, it doesn’t make sense for you to invest in a submarine cable… just to connect one barangay. In that sense, it’s cheaper to do satellite,” he said.

“But if you’re looking at Cebu or places where you can get more users, I think the traditional (connectivity) is still more economical,” he added.

The National Telecommunications Commission (NTC) recently approved the registration of Starlink Internet Services Philippines, Inc. as a value-added service provider (VAS). Starlink is a subsidiary of Elon Musk’s Space Exploration Technologies Corp.

The agency expects more foreign satellite broadband providers to enter the Philippines because of the amended Public Service Act, which eases the restrictions on full foreign ownership of businesses in key sectors such as telecommunications, shipping, airlines, railways, and subways.

Starlink’s registration as a VAS provider allows it to directly access satellite systems, as well as build and operate broadband facilities to offer internet services in the country. The company’s certificate of registration is valid until April 14, 2023. It is expected to cover villages in urban and suburban areas and rural areas that remain unserved or underserved with internet access services.

“The service is expected to bring cost-effective internet access in these areas,” the NTC said in a statement.