Hard work begins for 3rd telco player

Published November 20, 2018, 12:00 AM

by manilabulletin_admin

By Emmie V. Abadilla

The New Major Player (NMP) or Third Telco – Mindanao Islamic Telephone Company (Mislatel) – now begins the hard work within the next 90 days to see to it that the requirements imposed by the National Telecommunications Commission (NTC) are complied with after its confirmation, Mislatel Consortium spokesperson Atty. Adel Tamano told a press conference yesterday.

Telecommunications Commission (NTC) and the Department of Information and Communications Technology (DICT) conduct the opening and evaluation of selection documents for the new major telecommunication player that will be entering the Philippines at the NTC Head Office in Quezon City.. (PHOTO/ ALVIN KASIBAN)
Telecommunications Commission (NTC) and the Department of Information and Communications Technology (DICT) conduct the opening and evaluation of selection documents for the new major telecommunication player that will be entering the Philippines at the NTC Head Office in Quezon City recently. (PHOTO/ ALVIN KASIBAN)

This even as legislators yesterday confirmed that the telecom franchise issued to New Major Player (NMP), Mindanao Islamic Telephone Company, Inc. (MISLATEL) is valid in the wake of allegations its license was revoked 15 years ago.

The House of Representatives (HoR) Committee on Legislative Franchises Chairperson Franz E. Alvarez sent a letter to the National Telecommunications Commission (NTC) after the latter requested for guidance on the validity of Republic Act No. 8627, “An Act Granting MISLATEL, a Franchise to Construct, Establish, Install, Maintain and Operate Wire and/or Wireless Telecommunications Systems in the Philippines.”

“We aim to be a positive force in the telecommunications industry,” says Tamano.

But for the next 90 days after the award by NTC, the 3rd telco has much to do to comply with the post-award requirements. Tamano admitted in a radio interview that Mislatel’s franchise, granted in 1997, will lapse in 2023. So the consortium has to apply for a renewal of its franchise. He added that they will have to incorporate the consortium to see to it that China Telecom complies with the 40-60 equity requirements with Filipino shareholders controlling 60 percent of the company.

Initially, it committed a minimum average internet speed of 27 megabits per second on its first year of operations. This is comparable to the country’s current mobile speed of 6.03 Mbps, according to OpenSignal data as of September, 2018.

However, the NMP’s confirmation is just the start of a long process. “Now, the real work will begin,” Tamano acknowledged.

Next, the NTC will conduct a 90-day post-qualification review.

In the next three months, Mislatel has to formalize its corporate structure through the Securities and Exchange Commission, and secure all needed licenses and permits from the Philippine Competition Commission and the National Economic and Development Authority.

Then, it has to finalize its roll out plans and post a P25.7 billion performance bond.
After the review, NTC will grant the NMP its certificate of public convenience and necessity, along with a set of 3G, 4G and 5G radio frequencies with which to start its roll-out, around middle of next year.

Telecom regulators stressed that the existing telecom duopoly never made this kind of time-bound commitment which the NMP was required to make nor were they required to post any performance securities.

Furthermore, the existing duopoly had time on their side. They have built their network over decades. They believe that a third telco will not affect their margins in its first three years, at least, depending on how fast it can put up its infrastructure.

Based on a 1997 Committee Affairs Office report, MISLATEL’s 25-year franchise application was approved through House Bill No. 10073, which passed into law via R.A. 8627.

And while MISLATEL has “failed to diligently submit its required annual report to the Congress within 60 days from the end of every year, its non-compliance with the reportorial requirement did not affect the validity of its franchise.”

The confirmed NMP’s franchise “remains valid and subsisting,” Rep. Alvarez assured the NTC. “To date, the Committee has not received any notice of a judgment from any judicial or quasi-judicial body revoking or cancelling Mislatel’s franchise.”

Earlier, a former government official alleged that Mislatel’s franchise was automatically revoked in 2003 for its failure to join the stock market.

In the meantime, the Mislatel Consortium of Udenna Corporation, Chelsea Logistics Holdings Corporation and China Telecommunications Corporation invited other telco players, even those who “did not win the bid or decided not to bid, such as PT&T, Converge, etc., to partner with them for a faster roll-out.”

The NMP is also open to prospects of tower sharing with the duopoly of PLDT Inc./ Smart Communications Inc. and Globe Telecom.

“To make this venture a success, we will make other players, such as the regional telecommunications companies, cable operators, and broadband providers, our partners,” according to Mislatel’s statement issued during its conferment as the third telco player at the NTC.

The NMP committed to spend P257 billion to increase basic internet speed to 55mbps and cover 84 percent of the country’s population within five years. Based on this commitment, the consortium has to submit a performance bond equivalent to 10 percent or P25.7 billion to make sure that to accomplish that it committed in the first 18 months.