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Mislatel wins bid for 3rd telco; 2 'losers' protest

A consortium led by a Davao-based businessman in partnership with China Telecommunications Corp. has been declared the country’s third major player, which is expected to challenge the duopoly of PLDT Inc. and Globe Telecom Inc.

Mislatel wins bid for 3rd telco; 2 'losers' protest
BIG-BUCKS BIDDING. National Telecommunications Commission’s employees open the first box containing the bidder’s name and documents during the bidding for the right to be the third player in the telecommunications industry held at NTC Building in Quezon City on Wednesday. Manny Palmero
The National Telecommunications Commission announced Wednesday that Mislatel Consortium, a joint venture of Dennis Uy’s Udenna Corp., its subsidiary Chelsea Logistics Holdings Corp., Chinese state-owned China Telecommunications Corp., and Mindanao Islamic Telephone Co. Inc. as the provisional new telecommunications provider.

Uy is also president, chief executive officer, and director of Phoenix Petroleum Corp. and one of President Rodrigo Duterte’s biggest campaign contributors in the 2016 presidential election.

Mislatel committed to invest P257 billion over a five-year period, with P150 billion committed to its first year of operations.

In terms of Internet speed, the group committed to provide 27 megabits per second (mbps) in its first year, and 55 mbps in five years.

The company plans to cover 84 percent of the population in five years and 34 percent in its first year of operation.

Mislatel will be subjected to a document verification phase within three calendar days.

“Once we are confirmed as the new major player, we promise that we will work very hard to give the Filipino people world class telecommunication services that they deserve,” said Adel Tamano, a spokesperson for Udenna.

Mislatel was declared sole bidder after two other bidders, Philippine Telegraph and Telephone Corp. and the consortium of Chavit Singson’s LCS Group and TierOne were disqualified because of incomplete documents.

PT&T failed to submit a certification of technical capability from the NTC, while LSC-TierOne Group was disqualified for not submitting the “participation security” of P700 million.

The two disqualified bidders said they plan to submit separate motions for reconsideration before the NTC in the next three days.

PT&T president James Velasquez said the bidding process was unfair. “That is why we ask assistance from the court,” he said.

“If we were given a certificate we would have complied 100 percent. We have complied [with] all the requirements, including the P700-million participation security and the P10-billion paid capital,” he added.

He said a change in the terms in a bid bulletin was “irregular.”

Simon Fjell, co-founder of TierOne, said they will file a motion for reconsideration before the NTC to question its disqualification.

Sear Telecom, a consortium led by LSC Group and TierOne, said it will file a case against Mislatel for breach of contract.

Mislatel’s congressional franchise was used by Udenna and China Telecom for their bid, but they did not get consent from DigiPhil Technology Inc., a TierOne subsidiary that had the right of first refusal to the franchise, said Raoul Creencia, managing partner of Sear.

“If Mislatel will be adjudged to have breached the contract, it is therefore not eligible to partner with, so there is no congressional franchise and new major player. That’s a fatal flaw,” he said.

Another potential bidder, Converge ICT and partner KT Corp. did not submit bid documents because they found the venture “commercially unviable.”

Globe said it welcomed the new challenger, which is expected to foster greater competition that will benefit consumers.

“We are glad for the smooth selection process undertaken by DICT and NTC. As previously and continuously stated, we hope the government will equally support the existing telcos like Globe, which continue to provide services to millions of Filipinos, and in the case of Globe, over 67 million total subscribers,” said Globe general counsel Froilan Castelo.

The Department of Information and Communications Technology said the two disqualified bidders have been given three days to file their motions with the NTC.

“The bidding was very transparent,” he said.

“[We hope] the government could resolve the appeals within this month and come up with a [permanent decision of a] third telco in December,” he said.

He said the two disqualified bidders “could still appeal, but they have a slim chance [for reconsideration].”

He said Mislatel Consortium got a commitment rate of 456.84 out of 500 points and offered a P14-billion performance bond if it failed to deliver its promises to provide faster telecommunications and internet services in five years.

Lawyer Ella Lopez, NTC selection committee chairperson, said Mislatel Consortium’s first package was “declared complete and compliant.”

Senator Grace Poe said she remains optimistic that the entry of new telecommunications providers will put an end to consumers woes of slow Internet speeds, excessive fees for inferior service and “disappearing” prepaid loads.

Poe, who chairs the Senate public services committee, said she was fully supportive of efforts to break the telco duopoly and was in fact encouraging more players.

She said she hopes the winning consortium will live up to the expectations of the people and the mandatory quality standards for internet connectivity and mobile services.

“We must keep in mind that this third telco was allowed to come in because the paying subscribers have been longing for service commensurate to what they have paid for,” she said.

Having said that, the DICT should be transparent and lay out the considerations that qualified the bidder, she said.

Poe added that security concerns raised over the participation of a foreign company should not be sidestepped.

In the House, Deputy Minority Leader Harlin Neil Abayon said with a population of more than 100 million, the Philippines can accommodate two to four more telecommunications operators.

“All this talk about having just a third telco, in my view, limits our country’s growth potentials and consumer options,” Abayon said.

He said there is room for more than just three players, given the number of unused spectrum frequencies and the thousands of dead spots nationwide.

“We have a fast-growing population and an economy that is expanding by over 6 percent and can soon level up to middle-income economy status within the next few years,” he said.

READ: Two telecom bidders go to court vs government agencies

Topics: China Telecommunications Corp. , PLDT Inc. , Globe Telecom Inc. , National Telecommunications Commission , Mislatel Consortium
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