Workable telco proposal

After a yearlong selection process, the Duterte administration has finally settled on a third telco player to break the Globe-PLDT duopoly.

However, the actual start of operations of the winning bidder is clouded by two issues — one centering on security concerns because of the company’s Chinese-owned partner, and the second relating to lawsuits filed by the losing bidders.

There is, however, an ingenious proposal from Eliseo Rio Jr., former acting head of the Department of Information and Communications Technology (DICT): The prospective third telco should work not only with existing broadband operators, but also with its beaten rivals in the tension-filled selection
process that is now developing into a legal battle.

With lawsuits having invariably delayed many important government projects, Rio’s proposal is a “win-win” solution for winner Mislatel consortium and the disqualified bidders that have filed or are set to file lawsuits.

Rio urged Mislatel, the venture between Davao-based businessman Dennis A. Uy’s Udenna Corp. and China Telecom, to work out an arrangement that would allow it to use all the existing facilities of other players such as Converge ICT Solutions and those of disqualified bidders Philippine Telegraph and Telephone Corp. (PT&T), backed by businessman Salvador Zamora II, and Sear Consortium, whose investors include Ilocos politician Luis “Chavit” Singson.

Last Nov. 16, PT&T announced that it had filed a case before the Supreme Court to overturn its disqualification in the bidding for the third telco slot, while Sear Consortium said it would pursue a case against Mislatel consortium’s telco franchise holder, known as Mindanao Islamic Telephone Co. (Mislatel), for alleged breach of contract.

Few people may have heard of Mislatel, but the company has been around for quite some time. It got a congressional franchise on April 19, 1998, to construct, operate and maintain telecommunication facilities until 2023.

This existing franchise appears to belie the statements of some legislators that the Mislatel consortium needed to get a congressional franchise before it could operate.

Rio told this paper that he hoped all the operators could work out a mutually beneficial business arrangement. This could save the Mislatel group time and money by using facilities already on the ground.

Rio cited the existing cable facilities of Converge and PT&T, as well as Sear’s plan to use a broadband satellite, to provide services across the country.

The Mislatel consortium can make use of these existing facilities by inviting their owners as minority partners in the third telco player. Lawsuits can then be avoided or dropped.

Based on its proposal covering the government’s five-year commitment period, the Mislatel consortium offered to spend P258 billion to build a telco network, cover 84 percent of the country’s population and bring up the minimum average internet speed to 27 megabits per second on its first year, going up to 55 Mbps in the succeeding years.

The third telco would be facing tough penalties such as the forfeiture of its multibillion-peso performance bond and the return of awarded radio frequencies should it repeatedly breach its commitments.

Mislatel made a commitment to improve the country’s telecommunication industry and bring it at par with Singapore. What a waste it would be if, after a rigorous selection process, the operations of the third telco player are further delayed, perhaps for years, by unnecessary lawsuits.

Filipino consumers have waited long enough for better telco services. Meanwhile, the concerns about the threats to national security that some legislators have raised against the inclusion of the state-owned China Telecom in the third telco consortium should be readily answered by the DICT, which had earlier pointed out that existing laws covering the operations of telco companies were strict enough to guarantee the country’s security.

Rio’s sensible proposal should at least get a fair hearing among the dueling groups of telco investors, and be discussed as well by the larger public that has had to suffer all these years under the existing duopoly.

Better yet, Malacañang could head off the looming impasse by stepping in and backing the proposal.