Longer wait for a third telco
From the looks of it, the search for the third telco that can break the PLDT Inc. and Globe Telecom duopoly may be long in coming.
The committee created by Malacañang, which includes the Department of Information and Communications Technology (DICT) and the Department of Finance (DOF), to act on the matter has yet to decide on the selection process to meet that objective.
The DICT wants to give a premium on “highest committed level of service”; the DOF, on the other hand, prefers, among others, that the radio frequencies that will be assigned to the third telco be subject to a public bidding with a floor price of P6 billion.
The two schemes reflect the two departments’ mandate. For the DICT, it is to provide the public with efficient communications service at affordable prices; for the DOF, it is to raise funds for the government from all available sources.
Earlier, the inclusion of the DOF in the committee raised eyebrows from the telco industry because its subject matter is clearly within the DICT’s expertise.
With the addition of another cook in the kitchen, the preparation of the terms of reference for the third telco has been set back by several weeks. The delay has made President Duterte’s earlier promise to have a third telco operational by the second quarter of this year a case of wishful thinking.
If the DOF proposal prevails, it is doubtful if any of the domestic telco companies and their foreign technical partners will be interested in being named the third player that will break the PLDT and Globe Telecom duopoly.
With at least P6 billion paid upfront representing the cost of the assigned radio frequencies, the third telco will, before it has even broken ground, already be saddled with a huge operational expense.
That chunk of money can be better used to buy state-of-the-art equipment that can give the duopoly a run for its money in terms of efficient and affordable mobile and internet services.
With the selection criteria still unresolved, the prospective third telco operators have to put their best foot forward. They have to show that they have the financial resources, managerial capability and technical expertise to satisfy the public’s demand for better services.
Barring any legal challenge that may be filed to derail the selection process for some contrived reasons, two to three months from the date of the submission by the applicants of their proposals would be a reasonable period within which the committee (or the DICT, if it asserts its authority on the matter) can arrive at a decision.
Because of the potential lucrative returns from the operation of a third telco, the DICT should brace itself for calls or outright pressure from politicians who claim to have close links with Malacañang to influence the decision-making process.
It will take a lot of political will to make sure the choice of the third telco will be based purely on the merits or capability of the winning party, not political considerations.
Bear in mind that DICT acting Secretary Eliseo Rio Jr. is on borrowed time. Until he is formally appointed by President Duterte and his appointment is confirmed by the Commission on Appointments (CA), his tenure in office is uncertain.
Some CA members whose financial interests may, directly or indirectly, be affected by the selection of a third telco may not be averse to using their confirmation clout to make the DICT see things their way.
Considering the slow pace of our bureaucracy, the selection process may be completed by the end of the year, on the assumption that none of the losing applicants go to court or a congressional investigation is conducted to question the choice of the third telco.
If we factor in the length of time it may take for the third telco to be fully operational—at least one year from the grant of government permits—relief from the PLDT-Globe Telecom duopoly will probably come, at the earliest, by the middle of 2020.
Even then, don’t hold your breath because a lot of things can happen between the choice of the third telco and the formal grant of that award.
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