Exclusive: 10 local, foreign firms vie for third telco spot

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Metro Manila (CNN Philippines, August 17) — Several companies are sending their pitches to become the third telecommunications player, with the potential to break the duopoly of Globe and PLDT.

According to the Department of Information and Communications Technology (DICT) at least ten local and foreign telecommunications firms have expressed interest.

In an exclusive interview with CNN Philippines' Business Roundup, DICT Acting Secretary Eliseo Rio Jr. said that these firms include one Chinese, two South Korean, one Vietnamese and and one Norwegian.

"The most known would be China Telecom. We have two from the Republic of Korea - Korea Telecommunications and LG U+. We have a telco from Vietnam, Viettel, and a telco from Europe, Telenor," Rio told CNN Philippines.

Because the Constitution restricts foreign owned corporations from the telecommunications space, these corporations need a local partner to operate in the Philippines.

"Who are the local players? PT&T, Converge, Now, Easy Call and Trans-Pacific Broadband. More or less these are the five," Rio said.

China Telecommunications Corporation or China Telecom is one of the largest state-owned telco firms in China. As of 2017, it posted a net profit of nearly CNY 18.6 billion, or ₱144 billion.

Viettel Group, from Vietnam, is also a state-owned enterprise under the Vietnam Ministry of Defence. It's net income for 2017 was VND 44 trillion, or ₱101 billion.

Telenor is a Norwegian telco firm with a strong base in Scandinavia and Asia. As of last year, its net income was at NOK 12 billion, or ₱76 billion.

KT Corporation, formerly Korea Telecommunications, is the largest telco firm in South Korea. It has a net income of KRW 476 billion, or nearly ₱22 billion.

LG U+, the cellular carrier leg of LG Electronics, is another South Korean firm that has shown interest in becoming the third Philippine telco player. Its net income is KRW 547 billion, or around ₱26 billion.

These foreign companies, the DICT said, will back up local companies who need capital to enter the telecommunications fray.

According to its latest finance statement, Easycall Communications Philippines has a ₱10.37 million net income last year. Now Corporation reported a net income of ₱6.97 million last year while Transpacific Broadband Group International recorded a net loss of ₱4.58 million.

PT&T and Converge ICT Solutions have yet to release their latest income statements.

"We are considering to bid for the third telco player in the country to enable Filipinos greater participation in the digital economy," PT&T President James Velasquez told CNN Philippines in a text message, adding that new investors to the former telco giant has enabled it to return to its once held spot.

For his part, Rio is confident that these telco players will be strong enough to compete with Globe and PLDT.

"Basically, this is part of, why we give so much premium on their highest committed level of service," Rio said.

Based on the terms of reference of the DICT, local firms interested in bidding should possess a congressional franchise. Whether stand alone, or as a consortium, it should have a net worth of ₱10 billion and should have a proven technical capability of operating a telco service for the last 10 years on a national scale.

CNN Philippines' business anchor Mike Alimurong and digital producer Luchi de Guzman contributed to this report.