Editorial: Moving along

The Department of Information and Communications Technology (DICT) has announced that the final guidelines, paving the way for the third telecommunications company to enter the country, are already completed after seven months of deliberations.

The final rules made changes on some of the earlier proposal to place a minimum cap of 40% on the capital and operating expenditure. Now, it’s down to just 35%. Still substantial but it should encourage more competition from the bidders. The announcement came just in time after President Duterte pressured the DICT into speeding up the process of selection.

As of August this year, seven companies were on the shortlist to secure a license to operate in the country. These are China Telecom; LG U+ and KT Corporation, both of South Korea; American company AT&T; Vietnam’s Vittel; and Japan’s KDDI Corporation. However, they need to enter into a venture agreement with local companies because of our constitutional restrictions, which limits foreign ownership on select industries to 40%.

To prepare for the entry of the third telco player, the DICT has proposed to auction off the frequency spectrums. The winning bidder should roll out the highest capital and operating expenditure for a minimum of five years. The minimum bid amount was placed at P36.58 billion. However, in order to be a worthy adversary of both Smart and Globe, the third telco player should have at least P200 billion in war chest.

Under the government’s own timeline, the winning bidder should be announced by December this year as the participating bidders are told to submit their five-year roll-out plan by next month.

The Memorandum Circular (MC) No. 09-09-2018 of the DICT, which outlines the final guidelines is an important step to realize the Filipinos’ dream of faster Internet. We’ve been suffering for so long. Hopefully, two years from now, we can break free from the shackles of the duopoly of both telecommunications companies.

Posted in Opinion