Number portability attractive to ‘3rd player’ — DICT

THE Department of Information and Communications Technology (DICT) said it believes mobile number portability, adjustments to foreign ownership rules, open access, and spectrum reallocation will make setting up a third telecommunications company more attractive to investors.

DICT Acting Secretary Eliseo M. Rio, Jr. said existing and proposed legislation on these matters will enable the “third player” to compete effectively with incumbents PLDT, Inc. and Globe Telecom, Inc. over the long term.

The government is set to select the third player within the year. It may also admit a consortium to compete against the duopoly of PLDT and Globe. The third player is expected to hit certain investment criteria and meet service standards which have yet to be released. Interested domestic firms, who may partner with foreign telcos to make a bid, include Now Corp., Philippine Telegraph and Telephone Corp. (PT&T), and Converge ICT Solutions Inc.

The Senate last week passed the “Lifetime Cellphone Number Act” or Senate Bill 1636, allowing users to retain their phone numbers even if they change network providers.

The law also calls for the removal of interconnection fees, making it easier to switch providers. Under previous regulation, users are charged P2.50 for inter-network mobile calls and 15 centavos for text messages.

The Senate is set to discuss on second reading a bill to amend the Public Services Act or Commonwealth Act No. 146, which specifies that foreign entities can only own a maximum of 40% of public utilities and services companies. Sixty percent of such a company must be owned by Filipinos.

Business groups have long sought amendments to the decades-old law. The foreign equity restrictions are said to be a hindrance in China Telecom’s investment in the Philippines. China Telecom was the company selected by the Chinese government to participate in the Philippine auction, Malacañang has said, though there has been speculation that foreign- equity limits are making it reluctant to pull the trigger.

The airline and telecommunications industries are also being considered for full foreign ownership.

Mr. Rio acknowledged that ownership restrictions could be making foreign telcos wary.

“When a foreign telco partners with a local telco, it would understandably want control of the partnership or consortium for it to be interested in investing,” Mr. Rio said in a message. He said earlier that the DICT will proceed with the selection process and not wait for the bill to be passed into law.

Senate Bill no. 1763 (“Promoting Open Access in Data Transmission, Providing Additional Powers to the National Telecommunications Commission”) is also up for second reading. The bill aims to regulate the data transmission industry, including interconnection so that data transmission firms “can connect to each other at the various segments and interfaces,” for easy entry into the market and to prevent any one or a combination of firms from dominating the market.