RP Gov’t Mints 4th Telco

The country now officially has its fourth player in the telecommunications industry.

This was after the National Telecommunications Commission (NTC) finally issued NOW Telecom Company, Inc. on September 14 the lengthy extension of its provisional authority (PA) to install, operate and maintain a national mobile telecommunications system. The authority is not specific to 3G or third generation mobile communications technology, but can extend to other technologies such as 4G, 5G, or even outer space.

The Palestinian Authority is subject to a number of conditions, the main of which is the infusion of additional capital of at least P1.9 billion based on the first two years of capital expenditures of P6.3 billion in the plan. of implementation submitted and approval of the Securities. and Exchange Commission (SEC) of the authorized and paid-up capital increase.

It also required that NOW Telecom accelerate the installation of broadband data service in suburban and rural areas and that in each of the project’s implementation phases, it will strictly comply with the 70:30 coverage ratio of urban network deployment to suburban and rural.

Meanwhile, the NTC order signed by Commissioner Gamaliel Córdoba and Deputy Commissioners Edgardo Cabarios and Delilah Deles prohibits Now Telecom from sharing or co-using its frequency with PLDT / Smart, Globe Telecom, DITO Telecommunity Corporation or any other entity without first obtaining the approval of the Commission.

There are only four licensees for cellular mobile telephony services (CMTS) in the country: Smart, Globe, Dito and NOW Telecom.

In extending NOW Telecom’s PA, the NTC said that based on the company’s financial position, its debt-to-equity ratio meets the commission’s 70-30 requirement. He said that its total capital requirement for five years amounts to P15.9 billion and that the company has to infuse at least 30 percent of the total investment requirement over two years or in the amount of P1.89 billion.

It will be remembered that it was on February 22, 2018 when President Duterte through the Law of the Republic No. 10972 approved the renewal of Now Telecom’s legislative franchise for another 25 years to engage in the business of providing telecommunications, including electronic communications and electronic communications services in the Philippines and between the Philippines and other countries and territories, including outer space.

As the fourth largest telecommunications company in the country, NOW Telecom, a subsidiary of the publicly traded telecommunications, media and technology company Now Corp., is setting the stage for its public listing, as well as the rollout of its 5G network or fifth generation.

NOW Telecom recently appointed Unicapital Inc. as financial advisor for a planned corporate restructuring, as well as exclusive issuance manager and financial advisor for a planned listing by way of introduction (LBWI) on a stock exchange.

Together with its advisor, NOW Telecom is also evaluating the convenience of listing its shares on the local stock market or within the region, given its medium-term business plans.

“We are moving forward with the corporate restructuring of NOW Telecom to take it to the next level. NOW Corp and NOW Telecom were the first to introduce 5G broadband speeds of up to 2 Gbps directly to our existing business customers. Our next step is to extend this service to the residential and consumer markets, ”said NOW Group of Companies founder and CEO Mel V. Velarde.

According to industry watchers, NTC noted the financial support that the shareholder and the listed company NOW Corp. was giving to NOW Telecom as one of the key factors when it decided to rate the latter as the fourth telecom company.

NOW Corp.’s board of directors previously approved an offer by an existing shareholder, Velarde, Inc., to subscribe for 102 million NOW common shares, equivalent to a 5.75% equity interest in NOW’s subsequent subscription, to P2.25 per common. share or an aggregate amount of P229.5 million, as well as 60 million redeemable preferred shares or a total of P60 million.

The proceeds of the placement are used to contribute additional capital by the company in its telecommunications subsidiary, NOW Telecom, and for other general corporate purposes. The infusion into NOW Corp., officials explained, will help it infuse funds into NOW Telecom and increase its 19 percent stake in the latter.

Recently, NOW Corp. received from the SEC the valuation approval certificate confirming the valuation of advances of the shareholder Velarde, Inc. for P209 million as payment for the additional issue of 32.15 million common shares for P22.5 million with a par value 70 cents per share value of the unissued portion of NOW Corp.’s current authorized capital, based on the conversion price of P6.50 per share.

Earlier, NOW Telecom revealed that it plans to spend $ 713 million on its five-year 5G fixed wireless access business plan. The company aims to deploy the 5G FWA network in the National Capital Region and offer a broadband plan of up to 10 gigabits per second of service.

Of the $ 713 million, around $ 152 million will be used in the first three years, primarily to purchase new 5G radio equipment.

In a recent disclosure to the Philippine Stock Exchange, parent NOW Corp. announced its offer to expand its 5G broadband business services as it intends to increase its stake in its telecommunications subsidiary, NOW Telecom.

NOW Telecom hopes to build on its current stronghold, particularly commercial businesses, very dense residential areas, high-end residential homes, and high-rise buildings. Company officials emphasized that the telecom firm is well positioned in the high-end business and residential market in the country through 5G FWA and that with fairly limited competition in this space, there is a great opportunity to gain a share. profitable market.

It will be recalled that last year, NOW Telecom signed a memorandum of understanding with SK Telecom, South Korea’s largest telecommunications provider, to help design the company’s 5G network.

The company also signed a memorandum of understanding with Singapore-based HyalRoute Group, through local affiliate Philippine Fiber Optic Cable Network, Ltd. (PFOCN), regarding shared fiber infrastructure assets across the country.

Velarde previously noted that in all these years, the company has succeeded on the basis of a clear and highly differentiated competitive strategy by focusing on addressable and profitable target customers, and by building a wireless broadband network with cutting edge technologies.