The Department of Information and Communications Technology (DICT) released the final rules to govern the selection of the new major telecommunications player on September 21, after seven months of talks and deliberations with stakeholders.
The 27-page Memorandum Circular (MC) No. 09-09-2018’s release comes more than a week after President Rodrigo Duterte pressed the DICT to fast track the selection process for the new major telco player. In his televised interview with Presidential Legal Counsel Salvador Panelo on September 11, Duterte vowed that a third telco will be named by Christmas.
The publication of the circular is a big step forward but it implies a tight timetable for the inter-agency committee overseeing the selection process.
The MC will be effective 15 days after its publication in major newspapers, or on October 6. According to the DICT, interested participants may secure bidding documents from National Telecommunications Commission (NTC) a week after that or by October 13.
Based on the provisions in the circular, the official invitation for the selection of the NMP will also be published on major newspapers on the same date. The assessment of the participants’ documents will start based on the date that will be indicated in the official invitation.
The bidders would have until November 5 to submit their documents.
However, the MC did not disclose when the third telco player would be officially named. But in DICT’s accompanying statement with its release, it said “the new major player is expected to be identified on December 2018.”
New Criteria for Third Telco
The inter-agency committee previously decided that the selection process will use the Highest Committed Level of Service (HCLoS) approach, but the final terms of reference further emphasizes the government’s greater preference for the participant who will pledge better service.
Participants are required to submit a five-year rollout plan, during which they will commit to achieve average broadband speeds of at least five megabits per second (Mbps).The prospective major telco player must also commit to allocate at least Php40 billion in capital and operational expenditures for its first year of operations, and increase it by Php15 billion annually. By the fifth year, it must have a Php140-billion cash chest.
It will award higher points to participants who will commit to ramp up average broadband speed by at least two Mbps above the minimum, and those who will spend at least Php10 billion more than the minimum capital required annually.
It also said that participants will get an extra point for every one whole percent of added national population coverage (NPC) committed over the minimum required on a yearly basis. The minimum NPC for the first year is 10 percent, which will annually grow by 10 percentage points until the last year of the commitment period. The maximum NPC by the fifth year is 90 percent.
The NPC accounts for 40 percent of the total score, the annual capital committed is 35 percent while broadband speed make up for 25 percent, for a total of 100 percent.
The TOR also requires that the prospective third telco player, whether it’s a partnership or a consortium, should have a member that has an extensive recorded experience in providing national telco services for at least 10 years.
Elyssa Christine Lopez is a staff writer of Entrepreneur PH. Follow her on Twitter @elyssalopz