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DICT Chief sees no hitch in selection of 3rd telco player on Nov. 7

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True to his forecast and commitment, Department of Information and Communications Technology (DICT) Secretary Eliseo Rio Jr. said that the government will name the third telecommunications (telco) firm that submitted the highest committed level of service among all bidders in the next nine days.

The DICT Chief explained, “As soon as all the sealed bids are opened and placed side by side on November 7, the government can provisionally name the firm that submitted the highest committed level of service among all bidders, adding the highly anticipated bidding will proceed “as scheduled without any hitches.”

“We do not see major hitch in opening the bids,” Rio said when asked on the possibility of encountering another delay in the bidding process. He further explained by saying,  “the government put together for a year to consult all stakeholders to come up with reasonable terms of reference.”

“In fact, on November 7 at 10 in the morning we will open all the bidding documents and we will know who will be our provisional third telco provider,” the DICT Secretary added.

“The terms of reference (TOR) bind the winning bidder to the quality of service it committed in its pitch to become the third telco operator. With more competition in the market, the official anticipates the existing players will likewise step up their efforts to retain their subscribers”, Rio said.

“We will be monitoring their commitment because it is through their service that the third telco can build their subscriber base. The only way for them to get subscribers is to give better service and lower subscription cost than the existing players,” he pointed out.

“Of course, market forces will be in play, resulting to better service and lower costs, which the public will benefit overall,” he added.

The DICT Secretary explained, “The TOR also include a performance bond, which the government could forfeit if the winning bidder failed to maintain their committed level of service to its subscribers and the bond is “at least P14 billion.”

Meanwhile,  NOW Telecom sought a temporary restraining order on October 8 against portions of the terms of reference on the bond. However, the court denied the petition of the firm, saying “there is practically nothing to enjoin that will warrant the grant of obtaining such injunctive relief from this court at this time.”

However, the DICT Chief maintained that the TOR had been put together that way to ensure that only serious bidders with sufficient capital can participate in the bidding process. The third telco is projected to spend P40 billion in the first year and P240 billion in the succeeding five years, DICT estimates showed.

Rio cited the case of Altimax Broadcasting Co. Inc, which had been granted a congressional franchise in 1999, but sold its majority stake to a subsidiary of Globe Telecom in 2009 rather than use it. The sale of Altimax, which is owned by NOW Corp. President and Chief Executive Officer Mel Velarde, included frequencies awarded to them by the National Telecommunications Commission, which the firm did not use.

In a nutshell, the Secretary does not want any enterprising individual to cash in on this by bidding, win and sell.

There must be a serious commitment on the bidder. This is the reason why it takes so long for us to make this happen because we made sure that the TOR is clear to every bidder or company that bids.

Read related stories:

DICT Chief expects to name the 3rd major telco player by October 2018                                                                            

DICT Acting Chief very satisfied with public hearing                                                                                                                


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