By Emmie V. Abadilla

Globe Telecom, Inc. yesterday announced it has initiated discussions with independent third parties to establish a tower company to speed up building and deploying cellular towers in the Philippines.

“An independent tower company will be a win-win solution. It will monetize assets for capex use and help maintain our consistent dividend policy,” explained President and CEO Ernest Cu.

The telco, which has over 8,000 cell towers nationwide to date, wants to divest all or part of its tower assets to independent tower companies as part of its network expansion and optimization plan.

“We have been allocating over 30 percent of our total revenues to capital expenditure for the past five years and this level will be sustained over a period of time,” he noted.

Aside from monetizing assets, an independent tower company “greatly helps President Duterte’s initiative to open the telco industry to new players.”

“The plan is for these towers to be open for lease to new and existing players. This effectively lessens the barriers that a new entrant has to endure because they will not have to spend the capex to build towers and instead focus on rolling out the necessary network equipment,” Cu elaborated.

“This significantly reduces the time needed for a new player to rollout given the 25 permits and up to 8 months required to build one cell tower. Our move is also consistent with our position of being open to more competition in the telecommunications industry.”

The tower companies generally want multiple operators to locate in these towers to increase the returns for former and slash the cost for all locators.

Globe will work with the tower companies to determining the appropriate locations for prospective towers.

Even so, the telco sees rough times ahead to improve services and keep up with the rapid data consumption growth of its customers.

“We hope to continue working with the government to reduce the red tape in the permitting and right of way process. The only reason we are able to keep up with the demand for wireless data is because of the ultra-high capacity nature of our sites,” the Globe President pointed out.

For years, Globe has been ramping up its capital spend from P26.8 billion in 2012 to P36.7 billion in 2016 and R42.5 billion in 2017.

Recently, the telco disclosed its capital spend of P43.5 billion for 2018. Globe has been averaging 31% annually of capex spending to total revenues.

“We are providing opportunities for more Filipinos by providing connectivity and access to the internet, enabling industries like BPO to flourish, creating connected cities in the rural areas, initiating financial inclusion with e-payments and e-commerce, and enhancing customers’ digital lifestyles.”

“The sustained high capital spending year on year creates a ripple effect on the whole ecosystem through more jobs and better opportunities down to the sari-sari store level,” Cu elaborated.

So far, the Philippines has one of the lowest tower densities in the world, with under 20,000 towers serving a population of 100 million people. The lack of towers constrains mobile internet connectivity.

Vietnam, with a population of 90 million, has 70,000 towers for its telecommunications needs. Bangladesh and Pakistan have over 30,000 each.

Approximately, 50,000 more towers have to be built to optimize the country’s network deployment.