Now Telecom’s case vs. NTC may delay naming of third telco —DICT

Naming the third telco player may face another delay due to the lawsuit filed by aspirant Now Telecom against the National Telecommunications Commission (NTC), the Department of Information and Communications Technology (DICT) said.

Now Telecom announced earlier on Tuesday it filed for an injunction seeking to remove certain provisions in the final terms of reference in the selection of the third telco player, which the company claimed were not taken up during the series of public hearings. 

The provisions include the P700-million “Participation Security,” P14 to P24-billion “Performance Security,” and P10-million non-refundable ‘Appeal Fee’.”

Asked how the case may impact on the Duterte administration’s third telco initiative, DICT Acting Secretary Eliseo Rio Jr. said “this may delay the selection process,” but that it is now up to the court.

“Depende sa court kung ituloy nila ang TRO (temporary restraining order),” Rio told GMA News Online.

President Rodrigo Duterte earlier gave the concerned agencies a March 2018 deadline to name a third major player in the telecommunications industry.

However, issues hounding the selection process compelled the government to reset the timeline to December this year.

Duterte also warned that he would “take over” the selection process if there is no clear indication regarding the new major players by early November.

Based on the DICT’s timeline, the final memorandum circular—published on September 21—will take effect on October 6.

On October 8, Monday, prospective bidders bought bidding documents at the NTC. The documents are available until November 7.

Interested investors who bought the bidding documents have until October 22 to seek any clarification and the government has until November 22 to answer the queries.

The government is using the highest committed level of service in selecting the third telco player based on three major criteria: national coverage, internet speed, and capital expenditures.

The DICT chief belied Now Telecom’s claim that certain provisions it wants to remove from the terms of reference are “extortionary.”

“DICT and NTC take exception to NOW Telecom’s allegation that this initiative is a money-making scheme. All the above-mentioned fees are consistent and even lower than government standards and the requirements of Republic Act 9184,” the DICT chief said.

RA 9184 is the Government Procurement Reform Act.

“This is to attract possible participants while ensuring that the winner will be able to withstand intensive competition against the entrenched ‘duopoly’,” Rio said.

Telco giants PLDT Inc. and Globe Telecom are the dominant industry players.

Rio denied the allegation that the performance security and appeal fee were not included in the previous drafts of the terms of reference that was published and presented during a public hearing last August 23.

“The standards set forth in the terms of reference are in the interest of the Filipino people who desire better telecom services in the country. The participation security is there to ensure the financial capability of the incoming third telco, which must be at least comparable to the duopoly to enable it to effectively compete in the market which it aims to penetrate,” Rio noted.

“The performance security has been set high to more or less guarantee and assure the government that the third telco will deliver its commitments. Moreover, to discount any further delays in the entry of the third telco, an appeal fee was deemed necessary,” he said.

The DICT chief also questioned the timing of Now Telecom’s complaint, considering that interested investor had 15 days to raise their concerns before the final terms took effect.

“It is worth noting that the TOR was published for 15 days and could have been questioned at the onset. But why is it that it is only now, when the TOR is effective, and the bid docs are available, that it is being subjected to legal challenge? Is it to further delay the entry of the third telco?” Rio noted.

“Again, and to emphasize, the selection of a third telco is no small matter and to set the bar low for those who apparently cannot meet the standards is detrimental to the people who will directly benefit from a third telco that has not only the technical capacity, but more importantly the financial muscle to compete with the giants, Globe and Smart.”

Because the industry is considered a duopoly dominated by rivals Globe and PLDT-Smart, calls have been made for a third telco player to raise the quality of service while lowering the costs to consumers. —VDS, GMA News