The Philippines’ National Telecommunications Commission (NTC) has published draft criteria for interested parties to bid for a license to operate as the country’s third telecom operator. The NTC will hold a public consultation on the proposed rules in early March in Quezon City, Philippines.
The draft document states that Philippines President Rodrigo Duterte directed the NTC and the Department of Information and Communications Technology (DICT) to ensure the entry of a new major player in the telecommunications industry. According to the International Telecommunication Union (ITU), increased broadband penetration positively impacts GDP growth.
The new telecom player should have a net worth of at least PHP10 billion ($191 million), or have the capacity to raise equity from consortium members to the value, and have a congressional franchise, the suggested terms state.
If a consortium, Filipinos must hold at least 60% interest in the group with at least one of the members holding such a franchise. It adds that the company, or at least one of the members of a consortium, should have the “proven technical capability” to provide telecoms services and should not have any “bidder’s liabilities.”
The document also states that the new company cannot have a relationship with any telecommunications group with a mobile and broadband wireless market share of at least 40% (ruling out the two current dominant players).
The new player will be required to submit a network implementation plan within 15 days of being awarded a license to operate in the Philippines, and start commercial operations within 12 months. The network should cover at least 80% of provincial capital cities and towns, within five years.
The Philippines currently has two dominant telecom players with a minimum of 40% market share each – Globe Telecom and Smart Communications, the mobile unit of PLDT. In 2016, President Duterte warned the country’s telecom operators that if they did not improve their services he would open up the sector to Chinese competition.
China Telecom was highlighted by the Philippines government to be the third operator after President Rodrigo invited China to invest in the country’s telecom sector. State-run National Transmission Corp (TransCo) and Philippine Telegraph & Telephone (PT&T) have expressed interest in partnering with China Telecom to establish a new operator.