Selection rules for third telco out

Surprisingly, the DICT and the NTC issued the ToR a few days after a white paper circulated within the telecom space accusing DICT acting secretary Eliseo Rio Jr., of delaying the ToR.

After months of delay and rumors of anomalies, the Department of information and Communications Technology (DICT) and the National Telecommunications Commission (NTC) on Wednesday published the selection rules to choose the third telecommunications player to improve the country’s telecom services.

A joint statement by the DICT and the NTC said that the publication of the terms of reference (ToR) was released for the purpose of “public consultation”, set for next week.

The statement said, “This draft ToR, containing the rules and regulations on the selection of a New Major Player, is being released for the purpose of the public consultation that will be held next week and as part of its market study. It is without prejudice to further changes deemed necessary.”

Surprisingly, the DICT and the NTC issued the TOR a few days after a white paper circulated within the telecom space accusing DICT acting secretary Eliseo Rio Jr., of delaying the ToR.

The white paper said Rio prefers meeting with prospective telecom players individually and personally instead of consulting all existing and potential players as a group. Meeting the telecom players separately encourages speculations of irregularities, the paper added thus further complicating the process and delayed the drafting of the rules for more than three months.

President Rodrigo Duterte earlier set a March 2018 deadline for a new telecom player to start its operation, but the deadline was not met prompting the President to order the creation of an oversight committee to hasten the process.

Under Administrative Order No. 11, the President has ordered the oversight committee to assist the NTC in the formulation of the TOR for the selection and assignment of radio frequencies for the entry of new telco player. It will also oversee compliance of the NTC and other implementing agencies with the ToR provisions. The committee is composed of the DICT secretary as chairperson; Finance secretary as vice chairperson, Office of the Executive Secretary and the National Security Adviser.

The DICT earlier said a number of issues are needed to be settled before the ToR is released to the public and the telco industry stakeholders.

Among these issues include the distribution of frequencies which were formerly awarded to Bayan Telecommunications Inc. (Bayantel); establishment of a common tower policy which may be leased to new and existing players for the installation of communication facilities; commercialization of the National Grid of the Philippines-Transco dark fiber — unused fiber optic cables that may be utilized for the transmission of communication signals; and the reduction of interconnection rates among mobile networks.

The draft regulations tasked the NTC to form a selection committee to oversee the selection process among the interested parties to become the new player in the local telecom industry. The committee is also in charge of setting the criteria among participating players to cover average broadband speed, annual capital, national population coverage, and operational expenditure.

Under the draft rules, the third telecom player must cover at least 30% of the country’s population and provide a minimum speed of five megabits per second (Mbps) for their mobile and fixed broadband services.

The company is also required to put up a minimum P40 billion in capitalization to cover operational expenses. The P40 billion will also cover the operation, maintenance, and installation of the network.

A five-year “commitment period” will be imposed to the new telecom player that will be chosen based on the criteria point system computed annually. After the selection process, the chosen company will be given a Certificate of Public Convenience and Necessity (CBCN) with an initial 15-year license or until the expiration of its Congressional Franchise.