NOW sues NTC over NMP selection process

10 Oct 2018

The Philippine Daily Inquirer reports that NOW Telecom – among the prospective bidders for the country’s New Major Player (NMP) licence – is suing the National Telecommunications Commission (NTC) over details of the selection process. NOW, an affiliate of publicly listed NOW Corp, launched its legal action at the Manila Regional Trial Court on 8 October – the same day it acquired NMP selection documents from the NTC – to challenge key portions of the terms of reference requiring hefty financial commitments which it called ‘onerous, confiscatory and potentially extortionary’.

The Philippines’ initiative to select the NMP – also known as the ‘third telco’ – is aimed at breaking the market dominance of full-service operators PLDT Inc. and Globe Telecom, but a tight deadline of 7 November for opening bids now looks in doubt pending a court decision. NOW’s petition questions NMP financial requirements, including a 10% performance security bond valued between PHP14 billion and PHP24 billion (USD258 million-USD443 million) plus a PHP700 million participation security and PHP10 million non-refundable appeal fee. Elise Rio Jr., Department of Information and Communications Technology (DICT) acting secretary, defended the provisions yesterday, saying: ‘The government wanted to attract a strong contender. The bond is there because we want a third telco who can compete with Globe and [PLDT mobile subsidiary] Smart Communications.’

Filipino President Rodrigo Duterte has threatened to assume direct control of the NMP selection process if the DICT fails to meet its deadline. ‘The President will not be happy with this development,’ Rio said, adding that the third telco initiative was of ‘national interest’.

Earlier, the NTC confirmed that at least six groups have formalised their bids to compete for the third telco slot, including NOW, Telenor Group, Luis Chavit Singson (LCS)/TierOne Communications, Dennis Uy’s Udenna Corp and two more companies opting to remain anonymous. Other groups previously linked with a potential NMP bid include local firms Philippine Telegraph and Telephone Corp (PT&T), Transpacific Broadband Group International (TBGI), Converge ICT Solutions and EasyCall Communications Inc. (ECPI), as well as the likes of China Telecom, LG Uplus, KDDI, AT&T, Viettel Group and Vodafone Group.