Now Telecom chairman demands even playing field

Now Telecom chairman demands even playing field

The Philippines telecoms market is one that constantly hits the headlines and this heat stems from the historic duopoly of Globe Telecom and PLDT’s Smart Communications in the archipelagic nation.

In 2021, the World Bank estimated the Philippines’ population at around 113 million. According to the latest figures following the recent round of SIM registration numbers, Globe has 86 million subscribers and Smart serves around 65 million.

This presents a mammoth task for any newcomers to the market. Dito Telecommunity challenged the duopoly when it began commercial operations in 2021 and had amassed 12 million subscribers by the end of 2022.

This landscape presents a massive challenge for a fourth challenger, however this has not deterred Now Corporation’s mobile unit Now Telecom from entering the red-hot melee of the Philippines mobile market.

Currently, the company’s business is in enterprise, providing companies with broadband and fibre connections. The company was founded 32 years ago and under many guises, has proven to have a pedigree in connectivity.

Now Telecom gained its mobile telecoms licence in September 2020 to become the fourth mobile network operator in the Philippines.

In an interview with Developing Telecoms, Now Corporation chairman Mel Velarde (pictured) was nothing but bullish about Now Telecom’s chances to challenge the duopoly in the next five years and even surpass Globe and Smart with its strengths, but cautioned that this can only be done only with the “right government support”.

“We have a new president now that intends to build a level playing field as the past administrations always had their favourites (operators). President Ferdinand Marcos Jr doesn't have a telecoms crony and that is his current commitment.

“We want to be able to compete with Globe, Smart and Ditto on a level playing field. We want our frequencies to be protected, we want the regulatory agencies to act on our permits, so we can import more equipment, build and expand our network. If that is done efficiently, then we'll be in a very competitive position against the incumbents, but if a level playing field is non-existent, there's no way we can compete,” said Velarde.

Corporate tyrannies

If the right conditions are provided by Marcos’ government, Velarde believes Now Telecom can surpass the incumbent in terms of speed and quality of service within five years of a full commercial launch, which will eventually translate into market leadership.

“Past administrations in the Philippines have been protecting the duopoly and their favourite telcos. They were not just hamstringing us; they were not open to competition. Can you imagine for the past 40 years; you only have two major players who possess 80% of all radio frequencies? If a level playing field is applied, we'll be number one in five years,” said Velarde.

“There's no reason we won’t be number one. But if the government kills our chances then the same thing will happen again. The same duopoly who have become corporate tyrannies - will continue monopolising the industry.”

With vendor partner Nokia, Now Telecom built five pilot base stations in Metro Manila as the starting base for the operator’s plan to build a nationwide full standalone 5G network. The initiative was facilitated by grants from the US Trade and Development Agency, with the US government giving Now Telecom US$3.65 million in total.

The source of the funding is not a coincidence, as Now Telecom has signed up to the US government’s Clean Network initiative which seeks to prevent operators from buying equipment from companies that are deemed a threat to national security.

Western governments, led by the US, have long accused Chinese vendors such as Huawei and ZTE of providing a possible backdoor to national telecoms infrastructure through their infrastructure equipment, providing the Chinese government opportunities for espionage - an accusation Huawei and ZTE have long denied.

Velarde said using Western vendors will be a key differentiator that will work in Now’s favour in B2B, as consumers become more concerned about their data and the Philippines undergoes rapid digital evolution.

“We’re building our network with a proposition that we're only using trusted vendors and trusted equipment, especially to entities that have very sensitive corporate data, and especially those in the critical infrastructure that handles public services such as hospitals, healthcare, ports, utilities, those verticals require very secure clean network performance,” said Velarde.

Velarde admitted that initially, the appeal of a more secure network will be more attractive to businesses that are looking to tap into 5G use cases such as automation in factories, but believes its strategy of buying from trusted vendors will pay off in the long run.

India will be key

A proper consumer push will not be seen for at least a few years as 5G devices are not yet affordable or widespread enough in the Philippines, said Velarde. He tipped India to be the beacon for developing markets to copy in the years to come.

“We're looking at our Indian counterparts who are looking to produce a US$30 5G smartphone. Once that is achieved, that’s the opening for us to go get that device and bring it here.

“Because cost is the barrier to 5G here in the Philippines. I think our counterparts in India will be very successful and when that happens that will benefit the Philippines as well,” said Velarde.

Velarde said 5G will be the key to its competitiveness when it launches consumer mobile products. He pointed out how the operator found success in being the first to supply enterprise clients with fixed-wireless access (FWA) otherwise known as 5G broadband, equipping them with download speeds up to 2Gbps. FWA he predicts, will be the “money maker” for the operator in the archipelagic nation, as this has been proven by Verizon in the US.

The Philippines market is definitely one to keep an eye on; its operators are maturing as its citizens become rapidly more digital and share the insatiable hunger for data we see here in the West. Whether Now Telecom’s strategy will be a success, only time will tell - hopefully the real winners from another combatant in the Philippines mobile space will be the people.

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