Gov’t might reveal new telco player by June, to set new selection rules

MANILA, Philippines — The Philippine government might name the country's third telecom provider in June, a move that runs counter to President Rodrigo Duterte’s strict order to have the new player up and running by first quarter of 2018.

Meanwhile, the Department of Information and Communications Technology also announced possible revisions to draft rules for the selection of the third telecom player, including the removal of P10 billion net worth requirement.

At a stakeholders meeting on Tuesday, the National Telecommunications Commission said the deadline for the submission of bids has been tentatively set on May 24, 2018, with a decision scheduled for the first week of June.

For his part, DICT officer-in-charge Eliseo Rio Jr. said his agency decided to junk the hefty net worth requirement after potential entrants complained that such a rule “eliminates players” that can compete with incumbents PLDT Inc. and Globe Telecom Inc.

The P10 billion capital requirement was contained in the draft joint memorandum circular from the DICT, the NTC, the Department of Finance and the National Security Council. 

The draft document, which spells out the qualifications of participants for the selection of a new major telecom carrier, was released last February 19.

The NTC said it hopes to publish the final version of the joint memorandum circular on April 9.

Parameters

According to Rio, the government will no longer choose the new telecom provider mainly based on which has the highest committed investment for five years, saying that such a benchmark would allow an “inefficient" company to win.

“Most of the comments we received is, well, it’s as if an inefficient company can come up with so much investment just to win and then put up unnecessary infrastructure just to be awarded those frequencies,” the DICT chief said.

“We don’t like that,” he added.

Instead, Rio said the DICT came up with draft bidding parameters, where the winning bidder will be chosen based on “highest committed level of service” to ensure “efficiency” in investment.

“So, for now a very efficient telco can have all these services at the lowest possible investment. That is now possible,” he stressed.

Level of service commitments include network coverage, average Internet speed, range of mobile services offered and annual investment pledge spread over the next five years.

In terms of coverage, the government plans to “forfeit” the performance bond posted by the winning bidder should it fail to live up with its commitment to serve its planned volume of subscribers.

“The president wants coverage for the unserved and underserved areas and... he wants the third player to be able to compete with the incumbents,” NTC Commissioner Gamaliel Cordoba said.

Duterte has invited foreign firms, backed by a consortium of Filipino businesses, to take a role in his country’s wireless communications industry to stir up competition in an effort to boost poor services.

PLDT and Globe say they welcome the competition.