3rd telco required to invest 1140-B minimum over 5 years
NTC approves rules on new major player
At last, the government yesterday (September 21, 2018) released the final rules on the selection of the country’s third telco player, which will be required to invest a minimum of 1140 billion to a maximum of 1240 billion over a five-year period.
National Telecommunications Commission (NTC) Commissioner Gamaliel Cordoba signed the official Memorandum Circular (MC) on the Rules and Regulations on the Selection Process for a New Major Player (NMP) No. 09-09-2018. The third telco is expected to be identified in December this year.
The MC, which uses the Highest Committed Level of Service (HCLoS) as the basis on determining the NMP, requires a minimum and maximum cumulative capital and operational Expenditure for each year was placed at 140 billion to 1140 billion for the first year; 165 billion to 1165 billion on the second year; 190 billion to 1190 billion, third year; 1115 billion to 1215 billion, 4th year, and 1140 billion to 1240 billion, 5th year.
Participants are also required to post a Participation Security in favor of the NTC "with a face value of 1700 million, equivalent to one half percent of their minimum Capital and Operational Expenditure at the end of the Commitment Period.
Deputy Commissioners Edgardo Cabarios and Delilah Deles were cosignatories of the memorandum, which Department of Information and Communications Technology (DICT) Acting Secretary Eliseo M. Rio Jr. also noted, as the chairman of the NMP Oversight Committee.
The MC will take effect 15 days after its issuance, after which, interested parties can buy the 11 million bidding documents from the NTC.
So far, DICT revealed that 15 telcos signified their interest to submit proposals. They have until November 5, 2018 to submit their bid.
PT&T, one of 6 local telcos who want to bid for the NMP slot, is ready to submit its proposal, President and CEO James G. Velasquez confirmed the other day.
Other interested local telcos are Converge, Transpacific Broadband Group, Easy Call and Tier One.
Interested foreign telcos include China Telecom, Korea Tel, LG, Vietnam Telecom, Telenor, AT&T and a Japanese firm.
Based on the MC, participants in the NMP bidding should hold a Congressional Franchise and should not be a related party to either PLDT Inc. or Globe Telecom Inc. They should have a paid-up capital of at least P10Billion and be experienced in the provisioning, delivery and operations of telecom services for the last ten years on a national scale.
The government shall assign Radio Frequencies to the NMP, subject to the latter’s compliance with a required percentage of national population coverage, minimum average broadband speed and capex during a 5-year "Commitment period". A participant should cover at least 10 percent of the population and at most 50 per cent during the first year of the commitment period. Coverage should range from 20-60 per cent in the second year, 30 to 70 per cent in the third year, 40 to 80 per cent in the fourth year and 50 to 90 per cent in the fifth year.
A participant will receive one point per annum for every whole one percent of the National Population coverage (NPC) over the minimum NPC up to a maximum NPC for each year.
Bids lower than the minimum population coverage for each year of the commitment period shall be rated as "non-compliant" and would no longer be processed further.
For every whole 2 Mbps of Minimum Average Broadband Speed over 5 Mbps up to a maximum Minimum Average speed of 55 Mbps, a participant will receive one point per annum. Bids of less than 5 Mbps minimum average broadband speed shall be rated as "non-compliant".
Participants are also required to post a Participation Security in favor of the NTC "with a face value of 1700 Million, equivalent to one half percent of their minimum Capital and Operational Expenditure at the end of the Commitment Period.
This Participation Security, in the form of cash or check, should be valid for 180 calendar days from the date for the submission and opening of the Selection Documents. Without it the participant will be automatically disqualified.