DICT releases draft guidelines for new third telco player

The Department of Information and Communications (DICT) released on Tuesday, June 26, the draft guidelines as part of the terms of reference to any new telco player seeking to compete with the current duopoly.

According the draft, the third player in the local telecommunications industry must first have an annual capital and operating expenditures worth P40 billion, must have coverage of at least 30 percent of the national population, and a minimum average broadband speed of 5 megabits per second (Mbps).

The criteria for the selection will be set as follows: 40 percent for national population coverage, 20 percent for minimum average broadband speed, and 40 percent for annual capital and operating expenditure over a five year commitment period.

“A participant’s annual point score shall be multiplied by the corresponding weightages reflecting the government’s policy priority of encouraging rapid network roll-out and the difficulty of deploying the NMP’s (new major telco player) networks and facilities in the shortest possible time,” the guidelines said.

The weightage should be at 100 percent for the first year; 140 percent for the second year; 130 percent for the third year, 70 percent for the fourth year and 60 percent for the fifth year.
The minimum national population coverage by the new telco player shall be set at 50 percent at the end of the five-year commitment period.

The National Telecommunications Commission (NTC) will create a Selection Committee consisting of four members.

Bidding participants must have a congressional franchise that is not related to any existing major telco firms, paid-up capital of at least P10 billion, and have experience in the delivery and operations of telco services in the last five years.

The NTC will be awarding to the new major telco player a certificate of public convenience and necessity for 15 years. It will be issued upon the approval of the Philippine Competition Commission, compliance of the P10 billion paid-up capital, approval of sale or transfer of stock by Congress and submission of performance security and business plan.

The participant is required to submit a performance security to the NTC, a rollout plan within 90 days of selection, quarterly reports, and deposit to the Land Bank of the Philippines 20 percent of committed expenditure within 60 days at the start of each year.

The DICT is set to hold a public consultation on the draft guidelines by next week. — Aerol John Pateña (PNA)

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