By Ashley Erika O. Jose, A reporter
PLDT INC. said the expected arrival of satellite communications providers this year is unlikely to significantly change market dynamics in the near term, citing installation limitations and high operating costs tied to mobile-first services.
The company said direct-to-cell technology remains in its infancy and continues to face service and accessibility issues despite growing regulatory support for new industry entrants.
“We are not afraid of direct-to-cell at this time. Because if you have tested it, or if you have tried it, it is a bad customer experience. At this point in time, we are not used to that kind of service,” PLDT Chief Operating Officer and Network Head Menardo G. Jimenez, Jr. during a company meeting last week.
This comment comes after Information and Communications Secretary Henry Rhoel R. Aguda said last week that two US providers are expected to start operating in the Philippines this year.
The Department of Information and Communications (DICT) said the applications of the two companies are at an advanced stage at the National Communications Commission (NTC). One operator may receive regulatory approval within a month after completing testing activities, while another is expected to launch services within a year.
Direct-to-cell technology allows mobile devices to connect directly to low-Earth orbit (LEO) satellites without relying on traditional cell towers. The technology is seen as a potential solution for geographically remote and underserved areas that lack traditional telecommunications infrastructure.
PLDT executives, however, say the services remain expensive compared to traditional mobile offerings.
“For a telecommunications company, satellite providers currently tend to charge very high costs,” said PLDT Senior Vice President and Head of Corporate Business Patricio S. Pineda III.
“I don’t think any of this takes away from what we’ve been trying to do for the last thirty to four years trying to drive our consumers to the most affordable packages,” he added.
Mr. Pineda said the company continues to expand its network coverage, including in isolated and disadvantaged areas (GIDAs).
Mr. Jimenez said PLDT’s wireless unit Smart Communications, Inc., and Globe Telecom, Inc., already cover about 96% of the Philippine population.
“That means we’re not including 4% of the Philippines, where are you going to use the satellites? I mean, you’re going to need them for backup. But if you’re going to pay the exorbitant fees they charge for backup. So, it’s good, and it’s exciting, definitely come to the Philippines,” he said.
Despite its reservations about current commercial operations, PLDT is also exploring satellite-based services through its partnership with Lynk Global, Inc. Interoperability involves testing a direct satellite connection to the device that would allow conventional cell phones to send and receive communications in areas without cell phones.
Mr. Jimenez said the technology is expected to improve over time, adding that PLDT is ready to expand related services as the market matures further.
The planned installation of additional satellite operators followed the enactment of the Konektadong Pinoy Act, or the Open Access to Data Transmission Act, which liberalized participation in the data transmission industry by removing the congressional franchise requirement for qualified industry participants.
The law aims to simplify approval and licensing procedures and encourage sharing of infrastructure to promote competition and connectivity services. Under the measure, data transmission industry participants may build, establish, maintain, lease, or operate data transmission networks and services without obtaining regulatory approval.
Separately, PLDT said it is considering listing its data center business as a real estate investment trust (REIT), although the company has yet to set a timeline for the plan.
PLDT Senior Vice President and Chief Financial Officer Danny Y. Yu said the company is exploring several fundraising options, including monetization of non-fiber assets and the sale of idle properties when market conditions improve.
On May 14, the PLDT board approved the resignation of Mr. Yu from May 31st. The board also approved the appointment of Leo I. Posadas as chief executive officer of the finance, risk, and sustainability group while simultaneously serving as executive vice president and treasurer effective June 1.
In the first quarter, PLDT reported a 1.77% drop in net income of P8.87 billion from last year as higher expenses dampened revenue growth.
Hastings Holdings, Inc., a PLDT Beneficial Trust Fund unit of MediaQuest Holdings, Inc., holds a majority stake in the PLDT Beneficial Trust Fund. BusinessWorld through the Philippine Star Group.
