Quality of telco service key to choosing 3rd player

The Department of Information and Communications Technology (DICT) veered away from its initial steep financial requirements for a prospective challenger to the PLDT Inc. and Globe Telecom duopoly, favoring instead a player that can offer better services, internet speed and coverage.

The DICT held its second public stakeholders’ meeting on Monday for the selection of a new major telco player. Up for grabs are unassigned 3G, 4G and potential 5G radio frequencies.

Officials, led by DICT Acting Secretary Eliseo Rio Jr., indicated that most items on its Feb. 19 draft—including the requirement for P10 billion in net worth and a primary bid parameter that considers highest committed investment over a five-year period— would be scrapped.

“We are no longer basing it on the amount of money you invest. We are now going to base it on actual results,” Rio said.

The DICT presented on Monday bid parameters recommended by the United Nations’ International Telecommunication Union as well as its own inputs, which included feedback from potential bidders.

While the final rules would be released around April 9 this year, the government was leaning toward what it described as “highest committed level of service.”

Level of service includes coverage, either in terms of population or geographic reach, committed internet speed, variety of services offered and also the five-year investment commitment.

Rio noted that reach was also important for the government given that around 40 percent of the country was either unserved or underserved by PLDT and Globe.

Potential bidders on Monday welcomed the changes but some were also worried about the business viability of serving smaller areas around the country.

“Globe and [PLDT subsidiary] Smart are not even paying attention to these areas because it is money-losing,” one official from an interested group told the Inquirer. “So we are studying how to make money.”

Rio said the DICT would maintain a performance bond, which would be forfeited in favor of the government should the third telco miss key rollout commitments.

The DICT is also tapping the help of other government agencies in crafting the rules, including the National Economic and Development Authority, the Public-Private Partnership Center and the Insurance Commission.

The bidding is tentatively set on May 24, while awarding could happen by early June 2018 at the latest, said NTC Commissioner Gamaliel Cordoba.

This is beyond the March 2018 deadline earlier set by President Duterte. However, Rio previously noted that Malacañang was agreeable to a reasonable extension.

Cordoba further explained that the actual bidding would be a multistep and “open process.” Once bids are in, the DICT will select the best offer, which will then serve as the minimum standard, Cordoba said. Once this is established, all qualified groups will be allowed to improve their proposals “until one bidder remains standing.”