The government named Mindanao Islamic Telephone Co. (Mislatel) consortium, composed of Davao City-based Udenna Corp., its affiliate Chelsea Logistics Holdings and Asian giant China Telecommunications Corp. (China Telecom), as the “provisional” third telco to challenge dominant PLDT Inc. and Globe Telecom.
Only three consortiums out of 10 interested groups showed up in yesterday’s bid at the National Telecommunications Commission (NTC) for the new slot opened to a third telecommunications player but only Mislatel qualified.
Udenna and Chelsea are controlled by Davao City tycoon Dennis Uy. Mislatel was the first and the only group to submit complete documents required in the process.
A consortium formed by former Ilocos Sur Gov. Chavit Singson also submitted an offer under the name Sear Telecom which is a tie up between Luis Chavit Singson (LCS) Group and Mindanao-based Internet provider TierOne Communications. Another was submitted by Philippine Telegraph and Telephone (PT&T) Corp which has long been in the telecommunications industry.
The selection committee disqualified Sear Telecom and PT&T for lack of documents.
Both firms were, however, given three days to appeal the selection committee’s decision to disqualify them.
Singapore status in 4 years
Department of Information and Communications Technology (DICT) Secretary Eliseo Rio, who oversaw the selection process, said Mislatel is a serious player as it pledged on its fifth year a coverage of more than 70 percent of the country with an Internet speed of 55 megabytes per second even in remote areas.
He said based on Mislatel’s proposed Internet speed, the country would reach the level of Singapore in telecommunications efficiency.
On the first year, Mislatel plans to cover urban areas since it is easier to roll out there. From the second to the fifth year, the consortium plans to cover rural areas.
The lowest Internet speed it committed would be higher than the average speed offered by Globe and Smart of less than 20 mbps, according to Rio.
He said a provision of the process requires a P14 billion performance bond that will be forfeited in favor of the government if they fail to meet their commitment.
PLDT, Globe welcome challenge
In a short statement, PLDT and its mobile unit SMART Communications said, “It’s going to be a colorful time. Competition and an active market will be there. It’s been active even with just two players.”
“Competition is the norm in a liberalized environment and will benefit our customers, the industry and the country,” PLDT added.
Globe Telecom said it welcomes “the new telco challenger” which is seen to help foster a healthy competitive environment and ultimately benefit consumers.
The new player has the potential of opening up new sources of revenue streams for telcos while providing consumers with more innovative products and services, the company said.
“We are glad for the smooth selection process undertaken by DICT and NTC. As previously and continuously stated, we hope the government will equally support the existing telcos like Globe, which continue to provide services to millions of Filipinos and in the case of Globe, over 67 million total subscribers,” Globe general counsel Froilan Castelo said.
Globe said to help foster competition, it took a step forward to fulfill its plans to divest its tower assets.
“It has started the process of incorporating a separate tower holding company. This initiative will allow the third player to rapidly roll out its network and launch commercial operations. It will also give smaller players the opportunity to scale up their business without the burden of high capital expenditures,” Globe said.
“The consortium is confident that Udenna Corp.’s extensive supply chain and knowledge of local industries will complement the world-class technology and telecommunications expertise of China Telecommunications Corporation,” the qualified group said in a statement.
“Its immediate priority will be to prepare and consolidate all the required resources in order to provide the best telecommunications services that Filipinos have been aspiring for,” it said.
China Telecom provides most of the telecommunications services in China and is listed in the Hong Kong Stock Exchange and the United States’ New York Stock Exchange.
Udenna was incorporated in 2002 and is among the fastest-growing local companies engaged in the distribution and retail of petroleum products and lubricants of Phoenix Petroleum.
Ruling paves way for bid
The selection process pushed through after the Manila Regional Trial Court (RTC) junked the petition for a writ of preliminary injunction filed by NOW Telecom which did not participate in the auction.
President Rodrigo Duterte wanted a third major company in the telecommunications industry to improve telephone and Internet services in the country.