‘Weak’ criteria for third telco worries Dominguez

Finance Secretary Carlos G. Dominguez III expressed concerns over the alleged “weak” pre-qualification criteria in choosing the third telecommunications player in the country.

In a statement issued over the weeked, the Duterte administration’s chief economic manger stressed that mere “commitments” should not be used as one of the main criteria in the selection of the third player.

Dominguez believes the company’s financial capacity and experience should be the basis of the government to ensure that the third telecommunications player can effectively compete in the telco industry.

“I’ve expressed my concerns on the proposed process as I find the pre-qualification criteria as being weak, and I think that scoring should not be based on commitments,” Dominguez said.

“You know, the beauty contest in the past resulted in frequency hoarding and those companies failed to improve service. They just made money by flipping assets government owns. I don’t want that to happen again,” he added.

Earlier, the Department of Information and Communications Technology, an oversight committee tasked by President Rodrigo R. Duterte to approve the draft Terms of Reference for the selection process, failed to agree on the final criteria.

Among the main proposed criteria is “Committed Level of Service,” which Dominguez said “fails to set up parameters that will ensure that the third telco has the capability, both financial and technical, to compete in the long term.”

When asked as to the next steps, Dominguez answered that on the Department of Finance’s (DOF) end, they are currently evaluating pre-qualification criteria, like financial and previous telco experience, can be applied to improve the selection of the third player.

“Government should not forget what the task at hand is. The mandate of the President was not only to bring in a third telco player, but more importantly, to ensure that its entry will result in rendering better services to the consumers at the lowest possible cost,” Dominguez said.

As to when the criteria will be approved, Dominguez, a member of the oversight committee, said “we hope to be done with this task by Friday [this] week.”

In April, Dominguez warned against rushing the entry of a third telecommunications player as investment requirement for the successful entry was substantial, citing the investors also need to ensure there is available infrastructure for their facilities.

Dominguez, who is the vice-chairperson of the inter-agency committee overseeing the selection for the new telecommunications company, said the third player would need at least R200 billion to “effectively compete” against duopoly PLDT and Globe Telecoms.

“To effectively compete, the investments required of the new major telecommunications player is estimated to be at least R200 billion,” Dominguez said.

“The magnitude of the investment requires that all elements, including the necessary access to available telecommunications infrastructure, are in place for the new player,” he added.

Until the necessary infrastructure is in place, Dominguez believes “the bidding for its entry cannot be rushed.”