Dennis Uy-China Telecom venture confirmed as third telco

The National Telecommunications Commission (NTC) has confirmed the consortium of businessman Dennis A. Uy’s Udenna Corp. and state-run China Telecom as the new major telco player on Monday.

The confirmation of the venture, known as Mislatel Consortium, was expected given that the group was the only qualified bidder that emerged last Nov. 7 after two rivals were disqualified.

It was granted a day before Chinese president Xi Jinping visits the Philippines from Tuesday through Wednesday.

Coming a year since the Duterte administration launched its third telco initiative to break the PLDT Inc. and Globe Telecom duopoly, Eliseo Rio Jr., acting secretary of the Department of Information and Communications Technology, said in a press conference Monday that he was “relieved.”

Confirming a winner is an important component of the selection process and will be followed by a maximum 90-day post-qualification review.

During this period, Mislatel will be expected to formalize its corporate structure and finalize its roll out plans. The NTC will award the third telco with a set of 3G, 4G and potential 5G radio frequencies that the latter can use to launch mobile services and compete with PLDT and Globe.

“Once we give the frequency, they can start their rollout,” Rio said, adding that he expected this around the middle portion of 2019.

In its bid, Mislatel promised a minimum average internet speed of 27 megabits per second on its first year. This compares to the Philippines’s current mobile speed of 6.03 Mbps as measured by OpenSignal last September.

Mislatel said its internet speed will rise to 55 Mbps for the remainder of the five year commitment period.

The consortium also committed to spend P257 billion and bring coverage to 84 percent of the population in five years.

“Now the real work will begin,” Mislatel Consortium spokesman Adel Tamano told reporters at the NTC on Monday.

He added that Mislatel would be open to working with bidders who decided not to join and even those who were disqualified.

“We want to work together. We are offering our hand in partnership,” Tamano said.

Sear Consortium, backed by Ilocos politician Luis “Chavit” Singson, failed to qualify because it lacked the necessary letter of credit for its P700 million bid bond.

Philippine Telegraph & Telephone Corp. was disqualified because it was unable to a secure a certification that it met the technical requirement of having 10 years of operations on a national scale.

PT&T contested this and last Nov. 16, it filed a case before the Supreme Court in an effort to undo its disqualification.

The selection of a new mobile player delivers on a promise to shake up the telecommunications sector hinted at by the current administration as early as the 2016 presidential campaign.

Mr. Duterte’s issues over dropped calls and delayed text messages— coupled with perennial complaints from subscribers over slow and costly internet— served as the springboard for the administration to launch its third telco initiative in November 2017.

This led to the creation of the selection rules that used the so-called highest committed level of service (HCLoS) model.

The three major elements to be scored in the exercise were population coverage, internet speed and investment over the five-year commitment period.

The DICT also set steep financial safeguards to ensure compliance with the promises offered.

This included a 10 percent performance security based on the total five year capital and operational spending commitment.

The rules also barred the new mobile player from selling out to large telcos such as PLDT and Globe— closing off a practice that allowed the incumbents to amass large frequency holdings.