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Duterte pal is 3rd telco player

/ 05:30 AM November 08, 2018

Dennis Uy

The group of businessman Dennis Uy’s Udenna Corp. and state-run China Telecom was named the provisional third telco in the country yesterday.

The bidding deadline yesterday, which came a full year since the Duterte administration launched its third telco initiative to end the duopoly of PLDT Inc. and Globe Telecom, unfolded in dramatic fashion as South Korea’s KT Corp. backed out and a disqualified group threatened legal action.

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At the Philippine Stock Exchange, Uy-controlled companies associated with the third telco bid rallied while rivals saw double-digit losses.

Three groups submitted offers by the 10:00 a.m. deadline. These were Udenna-China Telecom, LCS Group TierOne Consortium and Philippine Telegraph and Telephone Corp. (PT&T).

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Within hours, LCS Group TierOne, whose backers included Ilocos politician Luis “Chavit” Singson, and PT&T, owned by the group of businessman Salvador Zamora II, were disqualified for lacking the required documents.

The sole qualified bidder, Udenna-China Telecom, was later named the provisional third telco by the National Telecommunications Commission (NTC).

Udenna is a holding company with interests in energy, logistics, property and education. China Telecom, China’s third largest telco, has about 250 million mobile subscribers and $50 billion in annual operating revenue.

The provisional winner will need to undergo a three-day verification process before being named the final new major player. The final winner will receive the necessary licenses from the NTC as well as a coveted set of 3G, 4G and potential 5G frequencies to launch its mobile services.

Eliseo Rio Jr., acting secretary of the Department of Information and Communications Technology (DICT), defended the selection process on Wednesday against any insinuation that the results were predetermined.

“The process was more or less open, objective and transparent,” Rio said on speculation that Udenna and China Telecom were favored given Uy’s friendship with President Duterte, whose administration initiated warmer ties with China.

LCS-TierOne failed to qualify because it lacked the necessary letter of credit for its P700-million bid bond. The group will file an appeal, its officials said.

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PT&T was disqualified because it was unable to secure a certification that it met the technical requirement of having 10 years of operations on a national scale. PT&T, a day before, had questioned this requirement at the Makati regional trial court.

“We have oral arguments for [Nov. 8] so hopefully we get some relief for the case that we filed,” James Velasquez, PT&T president and CEO, said on Wednesday.

Udenna-China Telecom, although the only group left in the race, is also facing a possible hitch as far as its qualifications are concerned.

A lawyer for LCS-TierOne said yesterday they planned to sue Mindanao Islamic Telephone Co. Inc. (Mislatel), the telco franchise holder tapped by Udenna-China Telecom, for breach of contract.

Raoul Creencia, external counsel for LCS-TierOne, said Mislatel failed to inform them that it would partner with another group despite an existing agreement requiring the franchise holder to seek its consent.

On Wednesday, NOW Telecom and the consortium of KT and fixed broadband provider Converge ICT Solutions were present at the NTC but did not submit their bids.

Meanwhile, Sen. Grace Poe called on the DICT not to sidestep security concerns over the participation of a foreign firm in a third telco player.

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TAGS: China Telecom, Dennis Uy, Udenna Corp.
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