Draft memo for selection of 3rd telecommunications player out

The government yesterday came out with the draft joint memo circular for selecting the country's third telco player, or New Major Player (NMP).

The NMP could be a corporation with a congressional franchise, or a 60 per cent Filipino consortium with at least one member holding a congressional franchise, but with deep pockets - a net worth of at least R10 Billion.

The winning 3rd player should also be a fast worker, able to submit its rollout plan within 15 days from the date of award and start commercial operations within one year. In five years, the NMP must cover at least 80 per cent of provincial capital cities and towns as well as 80 per cent of chartered cities.

And the new player should not be a related party to the country's telecom duopoly - PLDT Inc. or Globe Telecom.

The National Telecommunications Commission (NTC) will create the NMP Selection Committee composed of one chairperson and two members.

The committee will choose the NMP with the highest calculated and responsive bid based on the formula of Net Present Value (NPV) of committed investment for five years plus Net Book Valuw (NBV) of existing telco facilities, if any.

The participant with the highest bid who passes the post qualification as the highest calculated and responsive bid shall become the NMP.

However, if the bid awardee fails to comply with any provisions of the joint memorandum circular, the government will automatically recall its assigned frequencies.

The government will assign the 700 Mhz, 850 Mhz, 2100 Mhz, 2010 Mhz, 2.5 Ghz, 3.3 Ghz, 3.5 Ghz and 10.5 Ghz to the winner.

The NMP will post a performance bond equivalent to one half of one per cent of the amount of his committed investment for the first five years and comply with a 70:30 debt to equity ratio.

The winning third player shall also deposit a minimum of 30 per cent of his committed investment for the first year with a Department of Finance-specified Government Finance Institution within 30 days of the award.

In the succeeding years, the winner should deposit 30 per cent of the committed investment within the same period from the anniversary date until the fifth year.

Balance for the applicable year of committed investment will be supplied by a bank guarantee.

The Department of Information and Communications Technology, together with the NTC, will conduct its second stakeholders' consultation and present the draft memorandum circular with the terms of reference for the NMP next week, Feb. 27, 2017 at the Novotel Manila, Araneta Center, Quezon City.