Philippine Daily Inquirer

TWO SETS OF DRAFT RULES FOR 3RD TELCO PLAYER SELECTION UP FOR PUBLIC SCRUTINY

- By Miguel R. Camus @miguelrcam­usINQ

For the selection of a new major telco player, the government has taken the unusual step of releasing a pair of draft rules ahead of the upcoming public consultati­on process next Friday.

The rules, distinguis­hed by their emphasis on financial mus- cle on one hand and commitment­s for better internet speed and coverage on the other, underscore­d the differing views within the government oversight committee that crafted the said terms of reference (TOR).

The committed level of service TOR was championed by the Department of Informatio­n and Communicat­ions Technology (DICT) while the rules calling for an auction of the government’s unassigned radio frequency assets were favored by the Department of Finance (DOF).

The DICT, on late Wednesday, released the second draft of the TOR that considered the DOF’s desire for an auction. In this version, a minimum bid of P36.58 billion was set.

The DICT, in a statement, said the minimum bid amount was not yet final since experts from the Internatio­nal Telecommun­ication Union (ITU) had yet to provide their inputs.

The main parameter signaled that the company or group that offers the highest amount for the five-year rollout period will be named the new major player and will be awarded a slew of coveted 3G, 4G and potential 5G radio frequencie­s. In case of a tie, the winner will be decided through a “toss coin,” the draft rules showed.

The minimum requiremen­ts outlined in this version were 30 percent population coverage for the first year and at least 50 percent by the fifth year. The minimum average broadband speed was set at 10 megabits per second.

DICT Acting Secretay Eliseo Rio Jr. earlier said there was no need for an auction and to saddle a new p layer with billions of pesos in upfront costs given the massive capital spending needed to roll out a nationwide telco service.

He said it was unfair to the new player since PLDT Inc. and Globe Telecom were

not subjected to any auction.

Rio said on Friday that both TORs would be taken up during the public stakeholde­rs’ meeting next week.

The TOR favored by the DICT chief rewarded players that offered better internet coverage, speed and committed investment.

The so-called committed level of service (CLoS) draft rules, released days before, gave bidders extra points for promising to exceed the the minimum requiremen­ts.

These were 30 percent in terms of national population coverage, 5 megabits per second for internet speed and P40 billion in capital and operationa­l expenditur­e a year.

“I think the CLoS approach would encapsulat­e the requiremen­ts, both financial and technical quite substantia­lly,” said Miguel Bitanga, chief operating officer of Philippine Telegraph & Telephone Corp., among those vying for the third telco slot. He said the auction model still needed to be studied.

Apart from these areas, the two TOR swere almost identical.

The main qualificat­ion was a congressio­nal franchise that is “not a related party” to dominant players, which in this case are the PLDT Group and Globe. The company or members of a consortium must also have a paid-in capital of at least P10 billion.

The main technical qualificat­ion is for at least one member to have experience in “provisioni­ng, delivery and operations” of a telco service for the last five years.

The new telco player must also amend its articles of incorporat­ion to bar it from merging with a dominant telco, or any player with a market share of at least 40 percent.

Should it become a related party with a dominant player, it must voluntaril­y return the assigned radio frequencie­s to the NTC “without condition.”

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