Written by Lenie Lectura / Reporter
SMART Broadband Inc. (SBI), a subsidiary of Smart Communications Inc., was given the go ahead of the National Telecommunications Commission (NTC) last week to operate a more advanced technology involving data communications in far-flung areas that would cost the cellular firm P341.25 million.
Smart, the NTC said, is financially fit to finance the proposed project, particularly the establishment of a data leased channel circuit network service in the provinces of Zamboanga Sibugay, Sultan Kudarat, Southern Leyte, Biliran, Compostela Valley, Davao Oriental, Dinagat Island and Shariff Kabunsuan.
Capital expenditure (capex) for five years of operation is set at P341.252 million with revenues expected to hit P307.56 million and record a net income of P87.028 million during the period.
Of the total capex, the total equity requirement is P102.252 million while P25.49 million is needed for two years. SBI’s debt to equity ration is 66:34 and its paid capital is less than P1 billion.
“Based on the above figures, applicant is financially capable to finance the proposed project,” said the NTC. Smart Bro is Smart’s wireless broadband service.
The NTC said the company also appears to be technically qualified to undertake the proposed project and offer the proposed service. SBI informed the commission that it is expanding its coverage areas for its proposed data leased channel circuit network service to cover 95 cities and municipalities.
“Taking into consideration all the pieces of evidence presented including the report of the CCAD (common carrier authorization division), the NTC resolves to issue the provisional authority to construct, install, operate and maintain a data leased channel circuit network service in various areas in favor of herein applicant,” said the NTC in its order.
The NTC, however, has not yet assigned SBI the necessary frequencies for it to operate the said service. The frequencies, the agency said, would still be subject to availability.
SBI continued to expand as its wireless broadband subscriber base grew 26 percent to reach 689,000 as at end-June 2009. Of this number, 261,000 were on SmartBro’s prepaid service while 428,000 are postpaid subscribers. Smart Bro is today’s most widely available broadband service provider in the country.
Wireless broadband revenues grew 30 percent to P2.6 billion, a significant improvement over the P2 billion recorded in the first half of 2008.
In May of last year, SBI said it expected wireless broadband subscribers to increase by 450,000 more in three years assuming that it would be allowed to operate in the 700Megahertz (MHz) frequency spectrum.
SBI is applying for 48MHz of additional frequency in the 700MHz lower bandwidth and another 48MHz in the upper band.
The frequency bandwidths are essential to SBI’s planned deployment of WiMax, or Worldwide Interoperability for Microwave Access. WiMax is a telecommunications technology aimed at providing wireless data over long distances in a variety of ways, from point-to-point links to full mobile cellular type access.
SBI had told the NTC that there are various services that it could offer to the public using WiMax technology operating on the 700MHz. Among the basic services include broadband Internet, voice over Internet protocol, text messaging, and electronic messaging.
Interactive broadcasting services and web applications can also be accessed through WiMax.
Interactive broadcasting services include broadcasting portal, browser, shopping, multi-media service, e-mail and tribes. For web applications, SBI said a subscriber can access wireless video streaming sharing and digital voice communicator on a hand-held radio.