Govt issues final rules for 3rd telco selection
Final rules governing the selection of a new major telco player have been issued, with a challenger to the PLDT-Globe duopoly set to be named by December.
A memorandum circular (MC) approved on Thursday and released on Friday requires prospective players to have a minimum paid-in capital of P10 billion, at least 10 years of experience in delivering telecommunications services on a nationwide scale, no relationship to the dominant telcos and no outstanding liabilities with regulators.
Bidders can be a single domestic firm or a consortium holding a congressional franchise to install, operate and maintain telecommunications networks and services.
Under the highest committed level of service approach chosen by the government, points will be awarded based on pledges relating to national population coverage, minimum average broadband speed and capital/operational expenditures over five years.
Population coverage—given the greatest weight of 40 (with spending at 35 and broadband speed at 25)—should be at least 10 percent per year, or 50 percent by the end of the fifth year. At the maximum, the prospective third telco should cover 50 percent during the first year up to 90 percent by the fifth year.
Capital and operational spending, meanwhile, should not be lower than P40 billion for the first year and P25 billion for succeeding years for a total of P140 billion. The maximum level was set at P140 billion for the first year and P25 billion thereafter for a total five-year outlay of P240 billion.
The minimum average broadband speed was set at five megabits per second (Mbps), with one point to be awarded per year for every two Mbps extra up to maximum minimum average speed of 55 Mbps.
Prospective bidders can offer more than the maximum values for all three selection criteria but no additional points will be awarded unless there is a need to break a tie.
Selection documents can be purchased for a non-refundable fee of P1 million. A participation security of P700 million will also be required from prospective participants.
“The MC will be effective 15 days after its issuance or 6 October. Bidding documents can then be secured a week after from the NTC (National Telecommunications Commission) and will be given until 5 November to submit their bid,” the Department of Information and Communications Technology (DICT) said in a statement on Friday.
“The new market player is expected to be identified in December 2018,” it added.
Commenting on the circular’s release, Philippine Competition Commission (PCC) Chairman Arsenio Balisacan said it “brings us closer to the goal of having a choice beyond the existing duopoly. We welcome the inclusion of PCC’s inputs as we share the goal of having a competitive landscape in this important sector.”
The antitrust body has clashed with PLDT and Globe over their purchase of San Miguel Corp.’s
telecommunications assets in 2016, which it wanted to scrutinize given concerns that it would strengthen the duopoly.
Complaints over the quality of PLDT and Globe’s services prompted President Rodrigo Duterte to call for the selection of a third player. The process, however, was delayed by protracted discussions over the selection rules.
Earlier this month, Duterte warned that he would “take over” if the entry of a challenger to the PLDT-Globe duopoly was nowhere in sight by “early November.”
“By Christmas, alam na ng mga tao kung sino ang (the people will know who is the) third telco player,” he added.
The DICT has said that foreign companies such as AT&T, China Telecom, KDDI Corp., Korea Telecom, LG, Telenor, and Vitteland interested in partnering with local players for a third telco bid.
Among the domestic firms that have expressed interest in are Philippine Telegraph and Telephone Corp. and Now Corp.
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