DICT to push through with selection of 3rd telco by Q4 2018

The Department of Information and Communications Technology (DICT) on Thursday shut the door to further delays in the third telco selection process, saying that a new contender to the PLDT Inc. and Globe Telecom duopoly will be named within the fourth quarter of 2018.

DICT acting secretary Eliseo Rio Jr. made the statement at a public hearing on the latest draft terms of reference.

During the meeting, at least two participants described the schedule as “too tight,” proposing instead an extension of two to six additional months to give them time to prepare credible offers.

Rio, who reminded them that President Rodrigo Duterte had originally insisted on having a new major telco player by March 2018, said he was not inclined to grant more time to interested bidders.

“I know for a fact that there are a number of interested players who have done their due diligence,” said Rio, who explained that the bid documents would be available for purchase by Sept. 26 this year. “So it would be unfair to those who are ready.”

“It’s too late if you are just thinking of coming in now,” he added during the hearing, which lured over 250 people, including ICT and consumer advocates, representatives from PLDT and Globe, aspiring third telco players, and foreign embassy officials.

Keen interest

Rio said local companies that have expressed interest include Converge ICT Solutions, EasyCall Communications Philippines, NOW Corp., Philippine Telegraph and Telephone Corp. (PT&T), TierOne, and Transpacific Broadband Group.

He said foreign telcos that expressed their interest were China Telecom, South Korean companies KT Corp. and LG Uplus, Norway’s Telenor, and United States-based AT&T. Rio added that Japanese and Vietnamese telcos were also keen. A spokesman for Hanoi-based Viettel confirmed their interest in an email.

Industry veteran Renato Garcia, who joined PT&T as director and executive vice president last March, said they would meet the DICT’s deadline.

“We’ve been ready since way back, but we’d like to see the final rules” Garcia said on the sidelines of the public hearing.

Also among the participants was Adel Tamano, spokesman for businessman Dennis Uy’s Udenna Corp.

He declined to be interviewed but instead furnished reporters with a statement from Udenna, which indicated that the company has yet to decide whether it would participate in the third telco initiative.

Officials from Chelsea Logistics Holdings Corp., which is part of Udenna, earlier said they were keen on the exercise and were in talks with potential foreign partners.

A consultant for KT, during the same event, said they would study the DICT’s final TOR once it is released.

Selection process

The DICT will choose a new major telco player, which will be assigned a coveted set of 3G, 4G, and potential 5G radio frequencies, based on the highest committed level of service model.

The terms presented on Thursday were the draft rules issued by the DICT on Aug. 8, 2018.

Bidders will be scored based on their commitments on investment, national population coverage, and internet speed over a five-year period.

A new major telco player must ensure at least 10 percent population coverage on its first year, going up 10 percentage points every year until a minimum 50 percent coverage is reached on the fifth year.

Better offers can be made for each year to score additional points in the selection process.

The minimum investment was set at P40 billion annually, or at least P200 billion over five years, while the minimum broadband speed was set at 5 megabits per second.

As with population coverage, bidders can offer better terms in those parameters to score more points.

Qualifications include a congressional franchise, a paid-in capital of at least P10 billion and 10 years of experience in the delivery and operations of telecommunications services on a “national scale.”

The third player will also be barred from merging with a dominant player, or any company with a market share of at least 40 percent.

Doing so would require the third player to return to the government the frequencies it had won. The Philippine Competition Commission recently gave its inputs aimed at strengthening this area. /ee

READ: DICT: Entry of 3rd telco player rests on ‘quality of service’