Stricter criteria needed for 3rd telco selection

The head of the Duterte administration’s economic team wanted the track record and capability of prospective bidders, and not mere commitments, to be the foremost criteria in choosing the country’s third telco player.

In a statement on Saturday, Finance Secretary Carlos G. Dominguez III said that he found the proposed selection process for the prospective challenger to the PLDT Inc. and Globe Telecom duopoly to have had “[failed] to set up parameters that will ensure that the third telco has the capability, both financial and technical, to compete in the long term.”

The Department of Finance (DOF) is part of the oversight committee crafting rules for the entry of the third telco player, which also includes the Department of Information and Communications Technology, the Office of the Executive Secretary and the National Security Adviser.

The DOF noted that the “proposed process used ‘committed level of service’ as the main criteria in the selection of the third player.”

“I’ve expressed my concerns on the proposed process as I find the prequalification criteria weak, and I think that scoring should not be based on ‘commitments.’ You know, the contest in the past resulted in frequency hoarding and those companies failed to improve service. They just made money by flipping assets that the government owns. I don’t want that to happen again,” Dominguez said.

“The government should not forget what the task at hand is. The mandate of the President was not only to bring in a third telco player, but more importantly, to ensure that its entry will result in rendering better services to the consumers at the lowest possible cost,” he added.

As such, Dominguez said the DOF was in the process of “evaluating what prequalification criteria, like financial and previous telco experience, can be applied to improve the selection of the third player,” with this criteria expected to be approved by Friday.

In April, Dominguez cautioned against rushing the entry of the third telco player, citing the massive amount of investment needed by the firm poised to break the sector’s duopoly.

“To effectively compete, the investments required of the new telecommunications player is estimated to be at least P200 billion,” he said in a social media post. —BEN O. DE VERA