DICT: Choosing 3rd telco player via auction will benefit duopoly, not consumers
MANILA, Philippines — Department of Information and Communications Technology Secretary Eliseo Rio Jr. on Tuesday expressed anew his disapproval of the proposed selection of the country’s third telecommunications player via auction, which he said would only put consumers at the losing end.
To break a longstanding 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.
Malacañang had initially said the new major service provider would be named within the first quarter of 2018. But this target was hit with delays as the DICT and Department of Finance reached a stalemate on which selection mode should be used.
The DICT wants the company with the highest committed level of service to be chosen as the third telco carrier. On the other hand, the DOF prefers to hold an auction for the frequencies, with a floor price of over P6 billion from the previously reported P36.58 billion.
In a social media post, Rio said that under the DOF-backed selection method, the winning bidder is expected to recover the amount it paid to the government by passing it on to Filipino consumers.
He stressed that an auction will be anti-competitive because the incumbents were not obligated to buy their frequencies, adding that the proposal would force the new player to shell out a hefty amount that has nothing to do with improving infrastructure and services.
“In effect, the Filipino people will gain nothing from the auction of frequencies for they will pay for it in the long run... It will in fact just make of telco services more expensive than when the frequencies were awarded free,” Rio wrote.
“It will just make the winning telco uncompetitive to the duopoly that never paid the Filipino people for their frequencies. Thus, an auction will not benefit the Filipino people, it will only benefit the duopoly,” he added.
At a stakeholders consultation last June, majority of 15 interested public telcos said the new service provider must be chosen based on a beauty contest instead of financial muscle flexing, a major victory for the DICT.
READ: Stakeholders want 3rd telco picked based on commitments, not auction
Both the DICT and DOF sit on the committee that is deciding the third player selection process.
Finance Secretary Carlos Dominguez III reportedly said the stakeholders’ rejection of his agency’s preferred method of selecting the new entrant came as “no surprise.”
“Why should anyone reject something offered for free?” Dominguez said.
The DICT has set a target of September or early October for naming a third player.
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