MANILA -- A prospective new telco player should keep a safe distance from the industry's existing duopoly.
This was the stand of the Philippine Competition Commission (PCC) on the latest terms of reference by the Department of Information and Communications Technology (DICT), which utilizes the highest committed level of service (HCLOS) as the mode of selection for the new major telco player.
The bidder to be selected as the country's new major player should not have any merger plans or joint venture agreements with either the dominant telco players, the PCC said.
“In the event that the participant merges or enters into any business combination or joint venture with a Related Party to any Dominant Telecommunications Player, or otherwise acquires, directly or indirectly, or in stages at least 20 percent of the shares of stocks of a Related Party to any Dominant Telecommunications Player, it shall notify the Philippine Competition Commission of the said transaction, in accordance with applicable law, rules and regulations,” the commission said on its inputs in the terms of reference for the third telco, which was released to the media Monday.
Furthermore, the participant must return their assigned frequencies to the National Telecommunications Commission (NTC) in the event that it becomes a related party to dominant players PLDT Inc. and Globe Telecom.
The new major player is likewise mandated to submit quarterly reports on its commitments and its progress on pursuing its rollout plans.
It may also be required to submit the following information to the NTC, DICT and PCC: number of subscribers (per region, per types of service and semiannual basis); rollout of the service and/or spectrum; actual usage of the spectrum; geographic location of their infrastructure; list of cell towers, base stations, and gateway facilities (including status of operations and co-location agreements), among others.
A participant that fails to use any radio frequency spectrums assigned to it beyond the timeframe of their rollout plans shall return these to the government.
“PCC has recommended the foregoing inputs to address the competition concerns in the terms of reference for the selection of the NMP (new major player). With these, notification and review of the transaction could be dispensed with in accordance with PCC’s power to exempt entities from review…. However, in the absence of the foregoing inputs in the terms of reference, PCC would be constrained to pursue a regular review of the transaction,” the PCC added.
The PCC assures that it will participate in the consultations to be conducted by the DICT on the draft guidelines among the telco industry stakeholders and provide its views on the matter if needed.
DICT Acting Sec. Eliseo Rio Jr. has reiterated that a new telco player must have technical and financial capability to provide quality communication services in competition with the existing players.
“The third telco will come in a playing field where it has to compete with Globe and Smart. Globe and Smart (have) all the subscribers already kapag pasok nitong third telco (once the third telco comes in), it has to attract the subscribers of Globe and Smart. Of course, Globe and Smart will also put up their own marketing strategies and they have to retain subscribers. Ito ang magiging fight ng third telco (This is the fight where the third telco will be coming into),” Rio said in an earlier interview.
The DICT has released its latest terms of reference on the third telco earlier this month, following a decision by an oversight committee to approve HCLOS as a standard for its selection.
According to the guidelines, a participant should have a paid-up capital of at least PHP10 billion and must have an experience in the delivery and operations of telco services for the last 10 years nationwide.
A bidder shall be awarded through corresponding points based on network coverage (40 percent), broadband speeds (20 percent), and annual capital and operating expenditures over a five-year commitment period (40 percent).
The DICT and NTC will conduct a public hearing on the draft guidelines on Thursday, August 23. (PNA)
