Wednesday, November 21, 2018
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The curious 3rd telco bidding

The flavor of the week is Davao’s Dennis Uy and his Mislatel consortium with China Telecom. They reportedly “won” the bid to be the Philippines’ third telco. The question on everybody’s mind is, did they win it fair and square?

On the face of it, they did. Three bidders participated. It was a two-envelope system of bidding, where the first envelope submitted by the bidders contained all the documents and other requirements for the bid. Only if all the requirements and documentation were complete would the second envelope be opened.

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As it happened, two bidders—PT&T (Manuel Zamora) and LCS-TierOne (Chavit Singson)— failed to comply with all the requirements. PT&T failed to prove that it was operating on a national scale for the past 10 years (it went to court, but I was told that it withdrew its case two days ago), while LCS-TierOne, among other things, failed to submit the P14-billion performance bond required. These are not mere technicalities, Reader. Anyway, they are asking for reconsideration.

Well, Dennis Uy’s group submitted everything. So their second envelope was opened, and their commitment was that, within five years, they would have covered 84 percent of the whole Philippines and 70 percent within three years. They also guaranteed a minimum speed of 55 mbps (megabits per second) within five years (same as Singapore’s), with 27 mbps after three years. If they fail, they will forfeit their P14-billion performance bond. They are not going to go unscathed.

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You don’t understand all this, Reader? Here’s a basis for comparison: Globe and Smart’s current maximum speed is all of 10 mbps (never achieved); and it took them 20 years to cover 70 percent of the Philippines.  So Mislatel would be a real improvement.

What is curious, though, is that a group, Converge ICT, and its partner, KT (Korean Telecommunications), were all set to bid. Two days before the bid date, they had even called up Acting Department of Information and Communications Technology Secretary Eliseo Rio (a retired brigadier general) and told him they were looking forward to bid. And on the day of the bid itself, their lawyer was there. But he left and did not submit a bid.

They did make a statement later in the day, giving some limp reason why they decided not to bid. But it doesn’t compute, given the call to Rio and the lawyer appearing on the day of the bid.

Were they strong-armed by Dennis Uy (Davao) or by a call from the Palace? No one knows.

What is at stake here, Reader? Well, Mislatel’s foreign partner is government-owned China Telecommunications. Remember, President Duterte had first announced that he was going to give the third telco spot to China—and only backed down when Rio opined  that there might be national security problems if a Chinese government-owned company had control over a telco. Besides, there must be bidding.

Converge’s foreign partner is Korean Telecommunications, a privately owned company. Korea is reputed to have the second best technology (after Japan) in the region. Unfortunately, we will never know if their offer would be better than Mislatel’s. But even if it were not, I would prefer the Korean connection. Wouldn’t you? For national security reasons.

There is another very curious thing.  Instead of giving praise to Rio who presided with honor and competence over the whole proceedings, his replacement was announced. And he just read about it in the newspapers.  Thus is good service rewarded in this administration.

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Rio is an electronics and communication engineer and placed fourth in the licensure examinations. He was selected as the “Most Outstanding Professional in the Field of Electronics and Communication for the Year 2002.” His accomplishments while he was in the National Telecommunications Commission range from keeping SMS rates down and allowing the entry of SUN to provide competition to Globe and Smart, to facilitating the entry of call centers and BPOs.

No one will be able to put one over him.  He knows his stuff. He would not hesitate to call Mislatel to task if they erred. But he does not know President Duterte.

One would think that, being a retired military general (Mr. Duterte says he loves them), and given his qualifications, Rio would be a shoo-in for the DICT position, which he was holding in an acting capacity.

But having a military background with expertise does not cut it. You have to be a military man with Duterte connections—expertise not necessary.

solita_monsod@yahoo.com

 

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TAGS: column, Davao, Dennis Uy, opinion, telco
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