MANILA, Philippines — The Department of Information and Communications Technology scored a major victory on Friday after companies eyeing to be the country’s third telecommunications player voted in favor of the agency’s proposed selection process over the Department of Finance’s “auction” model.
To break a longstanding duopoly and boost service, President Rodrigo Duterte invited foreign firms, backed by a consortium of Filipino businesses, to take a role in the country’s wireless communications market.
Based on an impromptu survey done during a stakeholders consultation, majority of 15 public telcos that are interested in becoming the country’s new major service provider said they prefer the DICT’s proposal, wherein the company with the highest committed level of service (HCLoS) will be chosen as the third telco carrier.
Ninety-six percent of stakeholders from embassies, local government units and consumer groups, among others, also expressed their support for the DICT’s planned selection process.
Under the DICT’s proposal, potential entrants will be scored based on their commitments.
The DICT said a participant’s services should cover 30 percent of national population. The company must also offer a minimum average broadband speed of 5 Mbps to consumers and must have P40 billion capital and operational expenditure over a five-year period.
On the other hand, the Department of Finance wants to hold an auction for the frequencies, wherein the highest bidder for the five-year commitment period will be selected as the new major player.
Both the DOF and DICT’s proposals were presented during the stakeholders conference.
“The strength of the HCLoS model is that no money will be shelled out by the new major player and pay it to the government. They can use it for the capital and operational expenditures,” National Telecommunications Commission chief Gamaliel Cordoba said.
Delays
Malacañang had initially said the third telecom would be named within the first quarter of 2018. But this target was hit with delays as the DOF and DICT reached a stalemate on which selection mode should be used.
In his speech during Friday’s event, DICT Secretary Eliseo Rio Jr. said DOF’s “auction” model won’t ensure a “level playing field.”
“How can a new player have to put up money upfront and compete with Globe and Smart that has never been obligated to buy their frequencies?” Rio said.
“I’m following now the instructions of the president because this is basically my department’s responsibility. No one is going to put up a third telco—that would be my department,” he added.
Meanwhile, some stakeholders echoed Rio’s sentiment.
“It’s not about the money, it’s about the experience... I think the question is who are the players? Who is doing this job? And money is not the only answer. Money is just one component,” one participant said during the consultation.
“Can we just do away with the auction Terms of Reference and just concentrate on the original draft?... It is really a barrier to entry,” another participant pointed out.
The results of the stakeholders consultation will be presented either in a Cabinet meeting or once the oversight committee formed by Duterte to ensure an “integrated and transparent” entry of a new player convenes.