Entry of 3rd telco faces another delay

Prospects for the entry of a new telecommunications player—earlier trumpeted by President Duterte as the key to better telco services in the country— dimmed on Tuesday as a fresh delay was announced.

Eliseo Rio Jr., acting secretary of the Department of Information and Communications Technology (DICT), said in a text message that the draft rules to be used in the selection process had yet to be approved by a government-led oversight committee established last month.

The terms of reference, which will determine how the government will award a coveted set of 3G, 4G and potential 5G frequencies, were expected to be approved during the committee’s meeting on Monday.

The so-called third telco player will have to compete with the PLDT Inc. and Globe Telecom duopoly, which Mr. Duterte has been criticizing for “poor” service quality since his presidential campaign. The President appeared to have lost his patience in November last year when his spokesperson said a Chinese telco was invited to vie for the third telco slot.

Rio, who previously expressed hope that a new major telco player would be chosen by September this year, did not state the exact nature of the latest delay nor when the rules might finally be cleared. This was a departure from previous updates where prospective deadlines were set.

Delays to the selection process have occurred before, notably when Mr. Duterte’s March 2018 target was rescinded after the deadline lapsed. But the lack of information in this instance has hit a nerve among prospective third telco participants.

Mel Velarde, CEO of NOW Corp., said the company would now “assert its rights” over mobile frequencies that should have been awarded years ago.

“We will no longer allow ourselves to wait any longer. We demand our 2G, 3G and 4G frequencies,” Velarde said in a Facebook post Tuesday. “We will exhaust all legal and moral means to accomplish these goals for our public owners.”

NOW shares fell 19.6 percent on Tuesday, as did other listed companies deemed to be in the running for the third telco race. PLDT gained 1.62 percent while Globe was up 0.13 percent even as the benchmark index sank 0.53 percent.

Industry insiders have long pointed to delays caused by the establishment of an oversight committee, which includes the DICT, Department of Finance, Office of the Executive Secretary and National Security Adviser. The crafting of the rules was previously led by the DICT and National Telecommunications Commission.

“DICT has been prepared to release the TORs for the third player since April,” Winthrop Yu, chair of the Internet Society, Philippines Chapter, said on Tuesday.

“It is disappointing that other departments are not supporting the expeditious entry of a third player to challenge the duopoly and improve ICTs and competitiveness,” he added.

Rio earlier said that local players and big foreign telcos were keen on entering the Philippines. This was despite barriers such as the 40-percent constitutional limit for foreign entities.