New telco player being set up to fail?
Finance Secretary Carlos G. Dominguez III said yesterday that the third major player in the local telecommunications industry would be set up to fail unless the needed infrastructure and other business concerns are resolved by the government.
Dominguez said that he was not surprised when his proposed auction-based search for a third major telco player was rejected by interested investors, citing “why should anyone reject something offered for free, only promises?”
But despite the rejection, the Duterte administration’s chief economic manager said that he will still await for the formal report by the Department of Information and Communications Technology (DICT) from its stakeholders consultation hearing held last Friday.
However, Dominguez pointed that several pending issues in the telecommunications sector will continue to hinder the successful entry of the third telco provider.
“As I explained, the issues that have to be resolved in the Telcom industry are: Availability of frequencies for new players, access to government-owned dark fiber, interconnection charges, access to telcom towers,” Dominguez said in a mobile phone message.
“Unless these are resolved, how can a third player compete effectively?” the official asked.
Dominguez earlier said that he is standing firm on his proposal to auction off the frequency spectrums for the selection of the third major player.
According to Dominguez, commitment to quality and expansion of service is just one of the goals of the Duterte administration in selecting the third major telecommunications player, shrugging off criticisms that his proposed auction would only discourage aspiring investors.
DICT Acting Secretary Eliseo M. Rio Jr. said last Friday that prospective bidders might deem the auction process unfair, citing Dominguez’s plan will not provide a level-playing field.
But Dominguez responded that focusing only on quality and expansion of service is disadvantageous to the Filipino people.
“Level the playing field is one of the goals, the other goal is to make sure that the Filipino people benefit from the assets they have,” Dominguez said in an interview last Friday.
“In the past, this [frequency] was given for free, people kept it and the individuals were the ones who sold it. The Filipino people did not earn a cent from it,” the finance chief pointed out.
In particular, Dominguez cited the partnership between the Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom, Inc. to acquire the telecommunication assets of San Miguel Corp., which included frequencies given by the government to the diversified conglomerate for free.
San Miguel earned R70 billion from its buyout deal with PLDT and Globe Telecom.
“How much did San Miguel sell it, R70 billion! Obviously, we’re giving away something that has value. Level the playing field is one goal, the other goal is being fair to the Filipino people. That’s the more important part,” Dominguez explained.
Rio hinted last Friday that DICT is prepared to fight tooth and nail against Dominguez, President Rodrigo R. Duterte’s chief economic manger, who is pushing the auctionbased search for a third major telco player.