DICT switches focus to third operator’s rollout plans

7 Mar 2018

In a move that some have interpreted as a relaxing of its position, the Department of Information and Communications Technology (DICT) has dropped a requirement for the would-be third player to have a minimum capital of PHP10 billion (USD193 million), instead focusing its revised draft guidelines on the newcomer’s rollout, specifically its coverage, internet speed, and range of services after five years. DICT is poised to issue its final memorandum circular (MC) on the matter on 9 April 2018, with the government painfully aware of the challenges of a start-up faced with an entrenched duopoly in the shape of PLDT Inc. and Globe Telecom. Whilst the financial liquidity issue is important, the Philippine authorities appear to be coming around to the idea of a performance bond – possibly pegged at PHP40 billion, but the exact amount to be confirmed – with a clause that ‘should the chosen telco fail to perform to expectations, the runner-up bidder taking its place will be allowed to dip into the bond’.

Local press cites Gamaliel Cordoba, head of the industry regulator the National Telecommunications Commission (NTC), as saying that in year one, the successful third telco should be able to provide coverage to 15% of the population, broken down as 25% of cities, 10% of so-called first and second class municipalities, and 5% of third and fourth class municipalities. In its second year of operation, meanwhile, the third telco’s total coverage obligations rise to 30%, then 45%, 60% and 70% in years three-to-five, and finally 80% of Filipinos in year seven or eight.

The government has officially moved the deadline for bid submissions for the third telco slot to 24 May 2018 – pushing back its original target date by nearly two months. Officials confirmed the decision on 27 February.