China-Philippine group set to get telecom permit
> Two rival bids rejected, other foreign players opted out of tender for Southeast Asian nation’s third licence
MANILA: A consortium of China Telecom and companies controlled by a Filipino tycoon appeared poised yesterday to win the Philippines’ third telecoms licence, after two competing bids were rejected and foreign players tipped to participate opted out.
State-controlled China Telecom joined businessman Dennis Uy, whose interests include real estate, energy, shipping and logistics, under a consortium called Mislatel, hoping to win the right to challenge existing players Globe Telecom and rival PLDT.
The third licence, which could be awarded by year-end, comes at the behest of Philippine President Rodrigo Duterte and aims to boost the country’s notoriously patchy services and end a domestic duopoly long accused of being uncompetitive.
Duterte, who has made strong business ties with China his top foreign policy priority, had repeatedly expressed a preference for a Chinese telecoms firm to enter the Philippines, and even verbally “offered” the licence to Chinese Premier Li Keqiang.
Uy’s ties to the president are well known and he was a contributor to his 2016 election campaign, hailing from Davao, the city where Duterte was mayor for 22 years.
South Korea’s KT Corp issued a statement with Philippine company Converge ICT confirming they had decided against bidding, while Vietnam’s Viettel, which in August confirmed its interest in the Philippines, said it would not contest.
Norway’s Telenor had bought bid documents but did not enter the contest.
There were only two rival bids to Mislatel’s, from local companies, but both were rejected by the telecoms regulator for being incomplete. The two disqualified bids were from Philippine Telegraph & Telephone Corp and a consortium of TierOne and LCS Group.
Both bidders have said they would appeal the regulator’s decision.
Foreign firms are required by law to join a consortium due to a 40% ownership cap in a local telecoms outfit, which experts say has limited competitiveness in a sector worth about US$5 billion (RM20.8 billion) a year in revenue.
Analysts see the Philippines and its 105 million people as a potential growth market due to its thriving business process outsourcing sector and its underdeveloped mobile and fixed-line services, which consumer groups have complained are unreliable and expensive. – Reuters