4 more foreign firms keen on 3rd telco slot

Four telecommunication companies from countries other than China are interested to team up with a local partner to become the Philippines’ third telco player, a top official of the Department of Information and Communications Technology (DICT) said.

Eliseo Rio Jr., DICT officer-in-charge, told reporters on the sidelines of a press briefing on Wednesday that the third player might not necessarily come from China, in spite of President Duterte’s earlier pronouncements.

According to presidential spokesperson Harry Roque, the President wants the third telco player to be “up and about” by the first quarter of next year. Roque said that if an application for the coveted slot would not be approved within seven days after filing, it would then be considered approved.

However, Rio said the government would name the prospective third player by the end of the deadline set by the President. The third player would need to have a war chest of at least $2.7 billion to be able to compete with existing players, he said.

Rio did not identify the four companies, opting to let them make the announcements themselves. Nevertheless, he said these companies were from the United States, Japan, South Korea and Australia.

While he did not officially identify the interested parties, Rio cited familiar names such as Australia’s Telstra Corp. and Japan’s NTT Communications Corp.

To recall, Telstra earlier negotiated with San Miguel Corp. for partnership for a telecommunication venture last year, but later stopped from pursuing this project. NTT Communications, on the other hand, is already in partnership with telco giant PLDT Inc.
Rio said he was not sure how NTT’s possible next move would affect its existing arrangement with PLDT.

Nothing is definite or official, Rio said. “They just indicated through some publications that [they are] interested.”

Since the Philippine Constitution limits foreign companies from having full ownership of telcos in the country, the third player would have to be a partnership between foreign and local parties, he said.

In the end, he said, this remained a “business decision” since it would be up to local telcos to decide whether or not they would want to enter into partnership with foreign firms. Only after the joint ventures are formed will the government be able to determine which will be the best for the job, he added.

Rio said the government would not want another incident wherein a potential third player would be “gobbled up” by PLDT and Globe Telecom Inc., which was what happened when the two companies bought the telco assets of San Miguel Corp. last year.

Presidential Communications Secretary Martin Andanar previously quoted Rio as saying that China has selected state-run China Telecom to invest in the Philippines as the potential third telecom industry player. A Reuters report confirmed this based on an interview with Rio.

He, however, clarified that this did not necessarily mean that the state-run Chinese company would be the third player.

“I must emphasize here that for that slot, it is not [necessarily] the China telco. What came out in the news was the President ordered us to open up the industry and the China telco will be the third player. That’s not true,” he said, explaining that the third player would have to be a company owned by Filipinos. This Filipino company can have a foreign partner, he added.