In the text message sent by the DICT Chief to THEPHILBIZNEWS in the morning of November 26, asking us to read his 3 parts posts in his Facebook account to answer the issues that tend to infer that the bidding was rigged to favor one of President Rodrigo Duterte’s alleged campaign financiers and trusted ally Dennis Uy, to bag the new major telco player.

Rio, clarified that the selection process was aboveboard and beyond reproach which was also discussed during the public hearing on the selection process of the third major telco held last August 23, held at the Novotel Araneta Center Cubao, Quezon City.

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“We simply looked at documents, not the personalities. It was an exercise on objectivity. The bidding was done in the most transparent and open manner. Despite this, the losers still impute that the process was rigged to favor Mislatel,” Rio explained.

Mislatel was named the new 3rd major player and was the only compliant bidder during the auction held on November 7. The Mindanao Islamic Telephone Corp. is a consortium of Udenna Corp., Chelsea Logistics Holdings Corp. and China Telecom Corp. Ltd. They committed to cover 84-percent of the Philippine barangays with a minimum Internet speed of 55 Mbps through a five-year P257-billion capital and operation expenditures program.

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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.

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Sen. Grace Poe, the Chairman for Senate Public Services Committee, confirmed that the panel is set to convene an initial hearing to get updates on the “status of talks” for the entry, as well as the process of selecting the third telco.

Based on the report, there were already a few companies that expressed their interest to bid and hopefully become the winner that would compete with the two major players Globe and Smart.

Five companies have initially bought bid documents for the third telco player spot and these are Davao-based businessman Dennis Uy’s Udenna Corp., TierOne Communications International Inc. in partnership with former Ilocos Sur Gov. Luis “Chavit” Singson’s LCS Group of Companies, and Norway’s Telenor Group, NOW Corp., Converge ICT Solutions and Philippine Telegraph and Telephone Corp.

The hearing, is set to open at 10 a.m., was also convened to enable senators to assess the need for remedial legislation in the wake of reports that the Philippines has one of the most expensive mobile and data rates, even as the country is ranked near the bottom in Internet speed.

Apart from the telco players, also called to update the senators on ongoing talks for the entry of a third telco are Department of Information and Communications Technology (DICT) Acting Secretary Eliseo M. Rio Jr., National Telecommunications Commission (NTC) Chairman Gamaliel Cordoba, Securities and Exchange Commission Chairman Emilio Aquino, Philippine Competition Commission Chairman Arsenio M. Balisacan, Socioeconomic Planning Secretary Ernesto M. Pernia and Science Secretary Fortunato T. de la Peña.

Poe stressed that the Senate panel, exercising oversight powers, will seek an appraisal of latest “developments surrounding the much-awaited entry of the country’s next telco player in anticipation of the reported award next month.”  She affirmed her committee’s determination to “play a major role in tackling the congressional franchise of the applicant and our country’s need to have “meaningful competition in public utilities like telecommunications that will translate to lower costs and better service.”

Apart from the bidding telco players, government regulators from the DICT and the NTC are expected to appear at the Senate hearing today.