Gov’t names pro­vi­sional 3rd ma­jor telco

Business World - - Front Page - By Denise A. Valdez Re­porter

A CON­SOR­TIUM formed by China Telecom­mu­ni­ca­tions Corp., Den­nis A. Uy’s Udenna Corp. and its sub­sidiary Chelsea Lo­gis­tics Hold­ings Corp. and fran­chise holder Min­danao Is­lamic Tele­phone Com­pany, Inc. (Mis­la­tel) emerged as pro­vi­sional win­ner in the gov­ern­ment’s search for the coun­try’s third ma­jor telecom­mu­ni­ca­tions ser­vice provider af­ter its two con­tenders were dis­qual­i­fied.

The auc­tion’s out­come could still change, how­ever, as the dis­qual­i­fied bid­ders said they will file mo­tions for re­con­sid­er­a­tion within three days, which the se­lec­tion com­mit­tee will have to re­view within three days of re­ceipt of such ap­peals.

The con­sor­tium com­mit­ted for its five years of op­er­a­tions a cu­mu­la­tive cov­er­age of 84.01% of the pop­u­la­tion, to­tal cap­i­tal and op­er­a­tional ex­pen­di­ture of P257 bil­lion, and min­i­mum av­er­age broad­band speed of 27 Megabits per sec­ond (Mbps) in its first year of op­er­a­tion and 55 Mbps in suc­ceed­ing years, earn­ing it a to­tal of 456.80 points out of the auc­tion’s max­i­mum 500 points. Com­mit­ments on pop­u­la­tion cov­er­age (with 40% weight), min­i­mum av­er­age broad­band speed (25%) and cap­i­tal and op­er­a­tional ex­pen­di­ture (35%) are the three cri­te­ria used to grade the bid­ders.

Sear Telecom­mu­ni­ca­tions, Inc. — the fran­chise holder for the con­sor­tium of LCS Group of Com­pa­nies and TierOne Com­mu­ni­ca­tions In­ter­na­tional, Inc. (LCS-TierOne) — and Philip­pine Tele­graph and Tele­phone Corp. (PT&T) were dis­qual­i­fied for lack of re­quired doc­u­ments.

LCS-TierOne was not able to com­ply with the re­quired “per­for­mance se­cu­rity” com­mit­ment worth P700 mil­lion, while PT&T did not have a cer­ti­fi­ca­tion

from the Na­tional Telecom­mu­ni­ca­tions Com­mis­sion (NTC) prov­ing its 10-year na­tional scale ex­pe­ri­ence.

Once the se­lec­tion com­mit­tee com­pletes its re­view of both com­pa­nies’ ap­peals next week, it may then rec­om­mend to the NTC en banc the fi­nal win­ner. The NTC en banc will de­clare the win­ner of the auc­tion, who will then be given 90 days to com­plete sub­mis­sion of its busi­ness and roll-out plans, among other re­quire­ments.

It will get a cer­tifi­cate of pub­lic con­ve­nience and ne­ces­sity (CPCN) valid for 15 years or the length of the fran­chise of a bid­der, whichever is shorter; and ra­dio fre­quency bands of 700 mega­hertz (MHz), 2100 MHz, 2000 MHz, 2.5 gi­ga­hertz (GHz), 3.3 GHz and 3.5 GHz.

In Wed­nes­day’s auc­tion, LCS-TierOne called out the par­tic­i­pa­tion of Mis­la­tel with Udenna’s con­sor­tium, say­ing the com­pany has a live con­tract with a mem­ber of its own group, DigiPhil Tech­nol­ogy. “We are in con­sid­er­a­tion of P10 mil­lion that is a lim­i­ta­tion in the use of the fran­chise in the sense that Mis­la­tel is not al­lowed to have its fran­chise… used by some­body else with­out a prior of­fi­cial con­sent of DigiPhil. DigiPhil, in other words, has the right of first re­fusal,” LCS-TierOne le­gal coun­sel Raoul C. Creen­cia told re­porters.

He said the com­pany will file a case at ei­ther the Pasig or Makati re­gional trial court against Mis­la­tel in the com­ing days.

Rep­re­sen­ta­tives of two other firms showed up at the NTC of­fice — Now Tele­com Co. Inc. and Con­verge ICT So­lu­tions, Inc. — but de­cided not to sub­mit their doc­u­ments.

Now Tele­com said it was ad­vised by its le­gal team to not to par­tic­i­pate as such ac­tion may af­fect its pe­ti­tion for in­junc­tion against the NTC, which it brought up to the ap­pel­late court on Wed­nes­day. “Our po­ten­tial fil­ing for the new ma­jor player bid­ding will po­ten­tially af­fect the case and we were ad­vised by our le­gal coun­sels not to sub­mit our bid­ding doc­u­ments at the mo­ment,” Now Corp. in­vestor re­la­tions of­fi­cer Juan Miguel M. Honori­coLopez told re­porters.

Con­verge ICT, on the other hand, ar­gued that the auc­tion did not pro­vide a level play­ing field, since bid­ders were im­posed re­quire­ments which ma­jor tel­cos PLDT, Inc. and Globe Tele­com, Inc. did not have to com­ply with in or­der to op­er­ate. “What is de­manded from the bid­ders to­day were not asked from the dom­i­nant play­ers be­fore,” Con­verge ICT Spe­cial As­sis­tant to the Pres­i­dent Aris­tote­les Z. Eli­vaña told re­porters.

More com­pa­nies had been ex­pected to par­tic­i­pate in the bid­ding as 10 groups bought se­lec­tion doc­u­ments. The oth­ers were Vil­lar-led Streamtech Sys­tems Tech­nolo­gies, Inc.; AMA Telecom­mu­ni­ca­tion Corp.; Nor­way’s Te­lenor Group and Aus­tria’s Mo­bil­tel Hold­ing GmbH.

In­for­ma­tion and Com­mu­ni­ca­tions Tech­nol­ogy Act­ing Sec­re­tary Eliseo M. Rio, Jr. said the bid­ding turned out well.

“We think NTC did a very good job... The thing that I could have been more happy with kung sana marami pa ‘yung nag-bid [is if there wesre more bid­ders],” he told re­porters.

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