Proposed 3rd telco selection process ‘weak’ – Dominguez

MANILA — The proposed process in selecting the Philippines’ third telecommunications player won’t ensure that the entrant could effectively compete with incumbents, the Department of Finance said yesterday.

In a statement, Finance Secretary Carlos Dominguez III said the suggested selection process “fails to set up parameters” that can guarantee that the new service provider has the financial and technical capability to compete in the long term.

Dominguez also said the DOF is hoping that the second and final draft of the Terms of Reference (TOR), which spells out the rules and regulations in choosing the new telecom carrier, will be approved “by Friday next week.”

“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 to 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.

To break a duopoly and boost service, President Rodrigo Duterte invited foreign firms, backed by a consortium of Filipino businesses, to take a role in the country’s wireless communications market.

Based on revised selection rules issued by the Department of Information and Communications Technology last April, companies that are eyeing the third telco slot must have paid in capital of at least P10 billion.

Applicants should hold a congressional franchise and must have an experience in provisioning, delivery and operations of telecom services for the last five years.

The company with the highest committed investment and level of service for the next five years will be selected as the new telecom provider.

According to Dominguez, the DOF—which is part of a committee formed by Duterte to oversee the entry of the new player—is “evaluating what prequalification criteria, like financial and previous telco experience, can be applied to improve the selection of the third player.”

DICT Secretary Eliseo Rio Jr. earlier said the deadline for naming the new player depends on the release of the TOR. Malacañang had initially said the third telecom would be announced within the first quarter of 2018. He also assured the public that the announcement would happen “definitely before the end of the year.”