DICT, NTC preparing rules for selecting telco to compete with PLDT, Globe

Published: 5:31 p.m.., Dec. 11, 2017 | 12:04 a.m., Dec. 12, 2017

The government is preparing guidelines to support the entry of a third player to compete with PLDT Inc. and Globe Telecom, the so-called telco duopoly that the Duterte administration has committed to break.

Eliseo Rio Jr., acting secretary of the Department of Information and Communications Technology (DICT), on Monday said that the government, through the DICT and National Telecommunications Commission, was preparing the rules for a selection process, which he compared to a “beauty contest.”

The update came as Presidential Communications Secretary Martin Andanar said China had selected state-run China Telecom (CT), its third largest mobile player, to invest in the Philippines through a domestic partner.

The Philippine Constitution sets a 40 percent foreign ownership cap on certain sectors, including telecommunications.

Rio said that telcos from other countries were also welcome to enter the Philippines.

Telco backbone

Melvin Matibag, CEO of the National Transmission Corp., whose nationwide power and fiber optic network could be used as a telco backbone, said the state-run corporation could launch telecommunication services if its charter were amended.

“The way we project it, for Luzon we can do it in six months [and] the entire country within one year,” Matibag said.

A strong strategic partner, usually a foreign telco with deep pockets and technological expertise, is needed if the third player is to take on PLDT and Globe, which are partly owned by Japan’s NTT Group and Singapore Telecommunications, respectively.

In a social media post on Monday, Rio said that the rules would serve as the basis for the government to assign highly coveted frequencies to a third telco player.

Radio frequencies are the lifeblood of modern telecommunications. These allow the transmission of various forms of data, enabling phone calls, text messaging and internet browsing on smartphones.

Frequencies are owned by the government.

“CT, while chosen by China, must compete with other interested foreign telcos to be chosen by our telcos [or]
consortium,” he added.

China Telecom operates the biggest wireless network, the largest fixed-line network and the third largest mobile network in China with total assets exceeding $105.78 billion.

Companies that have expressed willingness to challenge PLDT and Globe include Philippine Telegraph & Telephone Corp. (PT&T).

Strategic partners

Earlier, PT&T chair Salvador Zamora II said the company was in talks with strategic partners, including China Telecom and South Korea’s LG Plus.

The coveted radio frequencies were the main target of PLDT and Globe when the two joined forces in 2016 to buy out San Miguel Corp.’s telco unit for almost P70 billion.

/atm /pdi