Ignite Telecommunications secures 25-year operating franchise

3 Sep 2019

The president of the Philippines has signed into law a 25-year telecoms franchise to Ignite Telecommunications, an Australia-based company with a focus on the business sector. Signed by President Duterte on 22 August, Republic Act 11411 grants the newcomer the rights to construct, install, establish, operate and maintain for commercial purposes, wired and wireless telecoms systems, including mobile (cellular), copper, fibre-optics, satellite, transmit and receive systems, switches and their VAS, among others. Further, Ignite should also secure a Certificate of Public Convenience and Necessity – or the appropriate permits of its telecommunications systems or facilities – from the industry regulator, the National Telecommunications Commission (NTC). Moreover, it is understood that under the terms of Republic Act 11411, charges and call rates for Ignite’s services (except those declared or considered as nonregulated services, whether flat rates or measured rates or variation thereof), are subject to the approval of the NTC or its legal successor.

The 25-year franchise authorises the company to provide telecoms services to the public, subject to the terms and conditions mutually agreed upon by the parties concerned and shall also be subject to the review and modification of the NTC. Its concession will, however, be revoked if it fails to comply with the following terms and conditions: it must commence operations within one year from the approval of its operating permit by the NTC; commence operations within three years from the effectivity of the Act; and operate continuously for two years. Ignite Telecommunications is also required to post a bond with the regulator to ‘guarantee compliance with and fulfilment of the conditions’ of its franchise award; the bond will cancelled after three years from the date of the approval by the NTC, subject to it meeting these goals. Additionally, Ignite is required to seek Congressional approval before any move ‘to sell, lease, transfer, grant the usufruct [i.e. legal right to use and derive profit] of, nor assign the franchise to any person, firm, company, corporation or the rights and privileges acquired thereunder to any person, firm, company, corporation, or other commercial or legal entity nor merge with any other corporation or entity, nor transfer the controlling interest of the grantee’. Any failure to report to Congress a change of ownership ‘shall render the franchise ipso facto revoked’.

Local press reports note that Republic Act 11411 takes effect 15 days after its publication in the Official Gazette or in a newspaper in general circulation.

Philippines, Ignite Telecommunications, National Telecommunications Commission (NTC)