Best service to be basis for 3rd telco pick: DICT

MANILA — An oversight panel in charge of choosing a new telco player has selected the guidelines for use in picking a bidder, based on its capability to deliver the highest committed level of service (HCLoS) during its meeting Friday.

This mode of selection, which is being pushed by the Department of Information and Communications Technology (DICT), was preferred over the auction of frequency spectrums — a move also backed by the Department of Finance — wherein a bidder will be awarded based on the highest offer of annual capital and operating expenditure for a five-year commitment period.

The HCLoS will award a new telco, through corresponding points based on network coverage, broadband speeds and annual capital and operating expenditures over a five-year period.

“We want the third telco to come up with services that will be at par with our neighbors. The advantage of the third telco is it is entering on a level playing field and can leapfrog to new technologies. If Globe and Smart do not improve their services, they will lose their subscribers,” DICT Acting Secretary Eliseo Rio Jr. said in a press briefing.

The department is in the process of finalizing the terms of reference as it seeks to address various issues, particularly the 3G frequencies of Bayantel, which is currently pending in the Supreme Court.

These frequencies will be awarded to the new telco player once resolved.

“If by end of July, we can have the Bayantel (issue) resolved, then we can have a published draft memorandum circular by the first week of August and that will be the start,” Rio said.

Furthermore, the DICT is hoping to complete the review of spectrum user fees of telcos by August. The DICT official had earlier said that higher fees should be imposed against telcos that are not efficiently using the frequency spectrums awarded to them.

The department hopes to select the new telco player by December and start its operations next year. It projects that this firm will be able to become established and deliver telecommunication services in competition with the existing duopoly by 2020.

“By 2020 we will have the third telco, the national broadband network, and the Facebook link and Bypass. That year, we will all feel better telecommunication services,” Rio said.

Rio has consistently stressed that pushing for an auction mode will force a new player to put up a huge amount to qualify for the bidding process, which has nothing to do with the rollout of telco infrastructures and improving services.

On the other hand, the DOF prefers to hold an auction for the frequencies, with a floor price of more than PHP6 billion to raise funds for the government.

The DOF abstained from voting between the two selection modes during the meeting.

Under Administrative Order No. 11, President Rodrigo Duterte has created an oversight committee to assist the National Telecommunications Commission (NTC) in the formulation of the guidelines for the selection and assignment of radio frequencies for the entry of a new telco player. The committee is composed of the DICT, NTC, DOF, Office of the Executive Secretary, and the National Security Adviser. Aerol John Pateña/PNA –