Floro L. Mercene
By Floro Mercene
The battle royale for the third telco player includes the harsh realities of the telecom business. Huge sums of money have to be thrown in before a company gets his return on investments (ROI).
Department of Information and Communications Technology (DICT) also requires a P300 billion capitalization for the winning franchise bidder for the next five years.
This precludes the fact that the duopoly of PLDT and Globe Telecom would just sit idly by.
The third telco player has to undercut the duopoly by offering lower pricing formula to get part of the business. With the entrenched PLDT and Globe Telecom, the third player would have to wait at least three years before turning in a profit, assuming that the duopoly would just sit on their hands.
This could be the reason China Telecom has suddenly disappeared. The two Filipino tycoons in the running are mining mogul Salvador Zamora who has bought into PT& T and Mel Velarde of NOW Corp, the broadband business .
Zamora is bringing in South Korea’s LG Corp while Velarde is eyeing an Indian telco conglomerate, who got interested after President Duterte’s visit to India.
Whoever gets the DICT nod will have to face the duopoly and that bears watching. But whether the 3rd telco player would improve Internet speed and connectivity is difficult to predict.
As the duopoly keeps an eye on their new adversary, they will still have to contend with the difficulty of getting permission for a cellularsite tower. That consumes at least eight months.