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Now Telecom sues NTC over bidding provisions

Now Telecom Inc., a company led by businessman Mel Velarde, asked the Manila Regional Trial Court to order the National Telecommunications Commission to remove certain provisions in the terms of reference for the selection of a new major player in the sector. 

Now Telecom said in a statement it filed a case against NTC before the Manila RTC Tuesday over claims of legal violations in the TOR released by the agency and the Department of Information and Communications Technology on Sept. 21.

Aldrich Dy, legal counsel of Now Telecom, said the company filed the case to “amend the MC [memorandum circular] by removing onerous provisions which are barriers to entry [of the new major player].”  

Now Telecom, which bought bid documents Tuesday, alleged that there was an insertion of new requirements not taken up during public hearings such as the P70-million  “participation security,”  the P14 billion to P24 billion performance security and  P10-million non-refundable appeal fee.  It said these requirements would serve as barriers to entry. 

It said these requirements would not only violate existing laws, but could also be declared onerous, confiscatory, and potentially extortionary. 

“Now  Telecom is suing NTC to protect the interest of its public shareholders and President Rodrigo Duterte from any suspicion that he is complicit to the money making schemes in the TOR for the third telco,” Now Corp. president and chief executive Mel Velarde said.

Velarde said he preferred President Rodrigo Duterte to receive all the bidding documents on Nov. 7 and that it would be best if the president, not the NTC, would choose the new major player.  

“We received a complaint filed by Now Telecom. We will refer the matter to the Office of the Solicitor General,” NTC deputy commissioner Edgardo Cabarios said.

Aside from Now Telecom, Dennis Uy’s Udenna Corp., the joint venture of businessman Chavit Singson’s LSC Group of Companies and TierOne Communications and Norway’s Telenor Group purchased bid documents.

Under the final terms of reference issued by NTC and DICT, the potential bidders will be chosen based on the highest committed level of service for over a period of five years. 

The three criteria are national population coverage with a weight of 40 percent, minimum average broadband speed of 25 percent and capital and operating expenditure with 35 percent. 

The rules stated that the minimum population coverage for the first year should be 10 percent, a figure that should reach 50 percent by the fifth year.

The new player is expected to invest a minimum of P40 billion in the first year and P240 billion in five years.

The selection committee will use a point system based on the documents submitted by the potential players.  The bidders should post a participation fee of P700 million, or equivalent to 0.5 percent of the minimum capital and operational expenditure at the end of the commitment period.

Topics: Now Telecom Inc. , National Telecommunications Commission , NTC
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