Tuesday, January 26, 2010

Palace allows Schutzengel Telecom congressional franchise to lapse into law

A NEW telecommunication company is set to enter the market after President Gloria Macapagal-Arroyo allowed a bill that grants it the franchise to operate to lapse into law. A Palace document showed that Republic Act (RA) No. 9857 lapsed into law on Dec. 20, 2009. The law grants a franchise to Schutzengel Telecom, Inc. to construct, install, establish, operate and maintain telecommunication systems in the country. The law is the consolidated version of Senate Bill No. 3387 and House Bill No. 6612. The Constitution provides that any bill ratified by both houses of the Congress will automatically become law even without the president’s signature 30 days after receipt by the Palace. The owners of the firm were not disclosed in the text of the Republic Act as well as in the Senate and House bills. Officials of the National Telecommunications Commission (NTC) were not immediately available for comment. Allowing a new firm to operate would maximize the potentials of the telecommunications sector, the introductory note of the Senate Bill read. "The industry has so much potential for growth, and the competitiveness of the industry players also appeals to other interested parties to avail [themselves] of what this growing market has to offer," it said.. But while the newly enacted law has given Schutzengel Telecom a franchise, it required the firm to secure the necessary licenses from the NTC for the construction, installation, and operation of its facilities. The law also stated that the franchise would be valid for a term of 25 years from the date of effectivity of the law, but may be revoked if Schutzengel Telecom fails to commence operations within three years upon approval of its permit by the NTC, operate continuously for two years, or start operating five years after the effectivity of the law. The new law also required the telco to list at least 30% of its outstanding capital stock on the local stock exchange within five years from the commencement of operations, to encourage public participation in utilities. Schutzengel Telecom had been reported as asking the NTC for a license to construct, install, operate and maintain a 3G or third-generation mobile telecommunications system in the country. A 3G license allows a telecommunication firm to offer services such as a faster mobile Internet and video streaming, among others. There is only one 3G slot left, and Schutzengel Telecom is competing with existing firms who already have 3G licenses, namely Globe Telecom, Inc., Smart Communications, Inc., Digitel Mobile Philippines, Inc. and Connectivity Unlimited Resources Enterprise, Inc. Bayan Telecommunications, Inc. is also seeking to get the last 3G license from the NTC. — Gerard S. de la Peña

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