DICT issues selection guidelines for new telco player

MANILA, Philippines — The Department of Information and Communications Technology (DICT) has issued the guidelines on the qualifications as well as criteria for selection of a new major player in the telecommunications industry, in line with President Duterte’s order that a new player should be able to enter by the end of the first quarter of the year.

Under memorandum order (MO) 001 issued on Jan.8, and signed by DICT officer-in-charge Eliseo Rio Jr., the interested party should have a valid congressional telecommunications franchise; not be a subsidiary or affiliate of or have corporate or financial interest in telco players PLDT Inc. or Globe Telecom Inc. as of Dec. 31, 2017; and must have a written and binding commitment from a foreign joint venture company, if applicable, as minimum qualifications. 

“The applicant with the highest committed investment for the first five years shall be selected,” the MO read.

The investment commitment would have to be secured with a performance bond.

For the assignment of frequencies, the DICT said the new major player would be allocated spectrum now available as identified by the National Telecommunications Commission (NTC). 

Non-compliance with the committed investment would mean an automatic recall of the assigned radio frequencies. 

According to the MO, the NTC, in consultation with DICT, would also issue no later than Feb.19, a memorandum circular containing the terms of reference for the selection and assignment of radio frequencies for the new major telco player in the country.

The DICT issued the MO as Duterte has directed the agency to fast-track the entry of a new major telco player in the country. 

Duterte has said the entry of a new telco player is a matter of national interest for the benefit of the public. 

Consumers have complained of dropped calls and slow internet speeds.

Earlier, Rio said four other companies from Japan, South Korea, US and Australia have expressed interest to enter the telco market in the country aside from China Telecom.

Given the 40 percent foreign ownership limit of telcos under the Philippine Constitution, the foreign firms would need to partner with local companies to be able to participate in the bidding for frequencies. 

PLDT chairman, president and chief executive officer Manuel V. Pangilinan said they welcome a third player and would await the outcome of the government’s decision.

“All we can do at this stage would be to prepare for that but also the main role, the main job for us is to really build a superior network for fixed and wireless, to ensure the service is world class,” he said. 

To demonstrate PLDT’s serious intent to improve services and prepare for the entry of a third telco player, the company is looking to spend more than P50 billion worth of capital expenditures this year, its highest allotment ever.

Pangilinan said spending for deployment of facilities for the wireless business would be slightly higher than the fixed-line business for this year.

Asked about a possible reallocation of spectrum being considered by the DICT, he said PLDT is currently utilizing assigned frequencies. 

“I think we should give careful attention to that particular subject matter. In so far as we are concerned, we are clearly using extensively the frequencies we acquired from San Miguel. They’re actively, extensively used by Smart and Sun and Talk N’ Text,” he said. 

Globe president and chief executive officer Ernest Cu said the Ayala-led telco also welcomes the entry of new players in the telco industry. 

Globe, has set its capital expenditures this year at $850 million, the same level as the previous year’s, with the bulk to be used to meet customer demand for more bandwidth-intensive content. 

Cu also said Globe has enough spectrum to support its subscriber base.

“We’re deploying it and a lot of it is going to go to the LTE (Long Term Evolution) to the home as well as on the 2600 [Megahertz] band. 700 [Megahertz] is being used. 2,300 [Megahertz] is used. Everything is being used,” he said.