4 local firms team up with foreign telecoms in bid to be 3rd player in PH

CEBU CITY – At least four local firms in consortium with foreign telecommunications companies have expressed interest to bid as a new and third telco player in the country, the Department of Information and Communications Technology (DICT) said.

Although he refused to disclose the local firms, DICT acting Secretary Eliseo Rio Jr. said these firms have partnered with foreign telco companies, including China Telecom, LG U+ of South Korea, KDDI Corp. of Japan, and companies from Vietnam and the US.

“They are still waiting for the final terms of reference (TOR) before they really come out. We are getting interest from four serious interested consortiums with foreign partners. Until we have them really confirm, we cannot discuss them,” said Rio, who was in Cebu on Thursday for the 2nd Philippine Impact Sourcing Conference (Piscon).

The oversight committee formed by President Duterte was still finalizing the TOR for the entry of a new major telco player in the country to break the duopoly of PLDT-Smart Communications Inc. and Globe Telecom, he explained.

Major concerns

So far, they have identified three major concerns that need to be addressed by interested bidders – coverage, speed, and cost.

The bidders must also have no ties with existing players.

“The needed infra will be part of their Committed Level of Services (CLOS) that they have to roll out upon award of the third telco player. Any infra in place before the bid will be given corresponding points,” Rio explained.

The oversight committee, which was formed through Administrative Order No. 11, is composed of the DICT as chairperson, Department of Finance (DOF) as vice chairperson, the Office of the Executive Secretary, and the National Security Adviser.

Award date

Based on their timeline, Rio said they hoped to already have the name of the third telco player and award their frequency by end of August 2018 from an earlier March 2018 deadline set by the President himself.

Before the President’s State of the Nation Address (SONA) on the first week of July, Rio said they would have already completed the TOR and the bidding process has already started with bidders buying bid documents.

They will then be given one-and-a-half to two months to submit their proposals.

To recall, the DICT’s top criteria in their previous TOR draft was focused only on the financial resources like having a net worth of at least P10 billion for a possible telco player. Another parameter scrapped was the consideration of a bidder that could offer the highest committed investment over a five-year period.

Expert advice

Rio said an expert from the International Telecommunication Union (ITU) of the United Nations (UN) advised them that there may be problems if the TOR would focus on who has the highest investment as it may not necessarily result in an efficient and inexpensive system.

Investing a higher amount may also mean that subscribers would have to pay a higher amount to avail of its services.

Rio said the oversight committee was coming up with a TOR that would emphasize on the bidders’ committed level of service with focus on those with wider coverage plans, faster speed and equivalent cost.

The winning bidder’s committed level of service would then become the government’s basis in monitoring the compliance of the entering telco player.

“Forty percent of our country is unserved or underserved. So we are trying to make this third player to be a model that will greatly improve our ICT (information and communications technology). With that model, Globe and Smart will have to raise their standards or else, iiwan sila ng subscribers nila (their subscribers will leave them),” he said.