Third telco player must have ₱10-B net worth – draft circular

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Metro Manila (CNN Philippines, February 20) — A third telecommunications player that enters the country should have a net worth of at least P10 billion and have "proven technical capability" to provide the service, according to a draft circular on selecting a service provider proposed by the Department of Information and Communications Technology (DICT).

If it is a consortium, it must be at least 60% owned by Filipinos, with at least one member holding a congressional franchise to install, operate and maintain networks which should be valid until December 31, 2023.

"In case of a consortium, the participant should provide evidence that it has the capacity to raise equity from potential consortium members to enable it to have a net worth of at least PhP10 billion, provided that all ownership requirements under the law are complied with," the draft said.

The government will consult stakeholders on these proposed terms over the next few weeks before the rules and regulations are finalized.

A final circular will take effect by the first week of March, the DICT said in its website.

Earlier, the Palace said DICT officer-in-charge Eliseo Rio requested to extend the deadline until May, but this was denied by President Rodrigo Duterte.

READ: Duterte wants DICT to stick with March target for third telco player

The government welcomes the entry of a third player to break the duopoly of PLDT Inc. and Globe Telecom.  It wants a new player that is not a subsidiary or affiliate of a telecom group that has a mobile and broadband wireless market share of at least 40 percent.

President Duterte has been vocal against the poor state of the internet in the Philippines, which has one of the slowest speeds in the region.

He said the only way to improve internet speed is to introduce competition.

During Duterte's bilateral talks with Chinese Premier Li Keqiang in Manila in November 2017, he offered China a chance to supply the country's newest telecom provider.

READ: Roque: Duterte's offer of telco role to China a 'political decision'

Malacañang later clarified any company should still undergo bidding. Under the DICT's draft circular proposed auction rules, the "highest calculated and responsive bidder" would be chosen.

The winning bidder should then be able to start commercial operations not later than 12 months after the date of award, the draft said.

It said the company must "cover at least 80 percent of the provincial capital cities and towns and 80 percent of the chartered cities within five years from the date of award."

Failure to comply with any of the provisions in the circular would result in the automatic recall of assigned radio frequencies, the DICT said. Failure to comply with the 70-30 debt-to-equity ratio within two years would also result in the recall of the award, to be replaced by the second winning bidder.