The Department of Information and Communications Technology is looking at a minimum bid of P36.58 billion for the spectrum frequencies that will be awarded to a new major player in the telecommunications sector that will challenge the duopoly of PLDT Inc. and Globe Telecom Inc.
The department issued another set of rules for the selection of the third major telco player, using an auction of spectrum frequencies. Under the second draft of memorandum circular, the participant that offers the highest amount of bid for five years will be selected as the new major player.
“After the said period, the NMP [new major player] shall be subject to the applicable SUF [spectrum users fee] pursuant to prevailing rules and regulations,” it said.
“The minimum amount of bid shall be P36.58 billion,” the draft circular stated.
The DICT said the minimum bid amount was not yet final as it was based on the spectrum user fees being paid by existing telecommunications companies and had yet to consider the inputs/recommendations of experts from International Telecommunication Union and best practices from other countries.
“Further, while there is a minimum bid amount, in this mode of selection, there will be no cap on the bid amount as the participant who submits the highest bid shall be selected as the new major player,” it said.
The National Telecommunications Commission will assign frequency band “• 700 megahertz, 850 MHz, 2100 MHz, 2010 MHz, 2.5 GHz, 3.3 GHz, 3.5 GHz and 10.5 GHz to the new major player.
The bid documents may be purchased by prospective participants from the NTC for P1 million.
“Only prospective participants that purchased the selection documents shall be allowed to attend the pre-selection information session, which shall be on a dat set by the selection committee,” the DICT said.
The newer guidelines will serve as an alternative to the previous memorandum circular issued by DICT which used the highest committed level of service as the basis for the selection of a new telco player.
Under the previous draft memorandum circular, the criteria for the selection of new major telco player are national population coverage (40 percent weightage), minimum average broadband speed (20 percent weightage), and the annual capital and operational expenditure (40 percent weightage), computed annually over a five year period.
The annual minimum levels for each of the criteria are: 30 percent for national population coverage, 5 megabits per second for the minimum average broadband speed and P40 billion for the capital and operational expenditure.
The selection committee will use point system based on the document submitted by the potential player for the selection of the third telco player.
“A participant’s annual point score shall be multiplied by the corresponding weightages in the table below reflecting the Government’s policy priority of encouraging rapid network roll-out and the difficulty of deploying the NMP’s networks and facilities in the shortest possible time,” the rules said.
Acting DICT Secretary Eliseo Rio described the selection process as “hybrid” where the parameters included the committed level of service and financial roll-out plan.
“The selection process is very objective and does not give any discretion to DICT and NTC,” he said.
The rules also said that the prospective bidders should have a net worth of at least P10 billion with a Congressional franchise to operate telecom services.
It said in case of a consortium, Filipinos should control at least 60 percent and at least one of the members should be a holder of a Congressional franchise.
Prospective bidders should not be a related party to any existing telecom group.