DICT tightens criteria, eases coverage requirement for 3rd telco bidders

The Department of Information and Communications Technology (DICT) has tightened the technical capability criteria for the selection of the third telco player, but eased the minimum population coverage requirement for prospective bidders.

The latest draft terms of reference (TOR) released by the DICT on Wednesday showed that participants in the third telco initiative "shall have experience in the provisioning, delivery and operations of telecommunications services for the last 10 years on a national scale."

Earlier draft rules required participants to have technical experience of at least five years.

DICT acting Secretary Eliseo Rio Jr. said that tightening the rule on the minimum years of experience for participating firms will ensure that the winning bidder "can really compete with Globe and Smart."

"Globe and PLDT/Smart have been around for many years already so we want a competitor who can match them in terms of years of experience," Rio said in a phone interview.

While the criteria on technical experience became stricter, the DICT relaxed the minimum requirement for participants' committed population coverage.

The latest draft TOR require third telco bidders to cover at least 10 percent of the national population in the first year. This will gradually increase to a minimum of 50 percent of population in five years.

The maximum population coverage will be 50 percent in the first year and up to 90 percent in five years.

Previous draft rules released by the DICT required participants to cover a minimum of 30 percent of population yearly to a maximum of 70 percent for the five-year period.

"We received complaints from potential bidders that the earlier coverage requirement of 30 percent annually was too hard for them to meet that's why we changed it," Rio said.

The latest draft rules follows the "highest committed level of service" (HCLOS) model, which was chosen over the Department of Finance-backed proposal to auction off unassigned frequencies to the possible players.

The HCLOS model involves a point system rating potential bidders' committed speed, coverage, and capital and operational expenditures.

The firm or consortium with the highest score will be named the third major telco player.

Prospective bidders will be scored on the following:

• national population coverage - 40 percent
• minimum broadband speed - 20 percent
• annual capital and operational expenditures - 40 percent

Rio said the DICT has 55 days from the release of the draft TOR to publish the final rules on the selection of third telco player.

He said a public hearing will be held on August 23 to scout for further inputs on the selection process.

The DICT is targeting to name the third telco player before the end of the year with September or October as "best-case scenario."

Because the industry is considered a duopoly dominated by rivals PLDT and Globe, calls have been made by no less than President Duterte and the public at large for a third telco player to raise the quality of service while lowering the costs to consumers. — BM, GMA News