Will the third telco save PH Internet?

March 18th, 2019 by · Leave a Comment

This article was authored by Grace Mirandilla-Santos, and was originally posted on telecomasia.net.

Competition does not happen overnight. Or, in this case, competition does not happen in one year.

President Duterte had wanted a third telco to be up and about by March 2018.

Today, a year after that (impossible) deadline was given, a third telco has been named but seems far from operating.

Compared to other countries where awarding a telco license is often a simple, administrative process, the Philippines’ selection process was a spectacle to behold.

NTC declared the Mislatel consortium, made up of Mindanao Islamic Telephone Company, Udenna Corporation, Chelsea Logistics Holdings, and China Telecom as the provisional new major player last November 7 after a special selection process.

After the declaration, the consortium was given 90 days to undergo a post-qualification process where it was supposed to form the official company through the Securities and Exchange Commission, get the approvals of the Philippine Competition Commission (PCC) and the National Economic and Development Authority (NEDA), and post a performance bond worth P25.7 billion or 10% of the winning bidder’s capex and opex. As of February 22, Mislatel has not posted the bond.

After a string of much publicized hearings, the Senate approved the change in ownership for the franchise to the Mislatel consortium. The House of Representatives had already given its approval through a concurrent resolution two months prior.

The mere fact that awarding a third telco license is such a big deal in this country can only mean two things: barriers to entry are high and people are clamoring for a new player.

After the NTC selection process and the Congress hurdle, the Mislatel consortium will need to roll out its network and comply with its promised population coverage and minimum broadband speeds.

Can the third telco accomplish its rollout obligations? Yes, but not without gaining access to existing infrastructure of the government, the incumbent telcos, or small broadband service providers in the municipalities.

The government had promised the third telco and other players access to the publicly funded cable landing stations in Aurora and Poro Point, the fiber optic network of the National Transmission Grip Corporation, and towers of the former Telecommunications Office.

There is a bill pending in Congress that can provide an overarching legal and regulatory framework that will support and guide how existing network facilities can be accessed for data services?

The “Open Access in Data Transmission” bill aims to lower regulatory barriers to entry in data services, promote infrastructure-sharing, expedite processing of permits, and make the spectrum assignment process more transparent and equitable. The bill was approved by the House of Representatives in November 2017 and is pending Second Reading in the Senate since March 2018.

One year later, there is still no movement in the Open Access bill that promises to help the third, fourth, or fifth market player to rollout a network, maximize existing infrastructure and resources, and co-deploy with other facilities owners in order to offer data services with better coverage at more affordable rates.

The Senate has a few days left after the May elections to approve this landmark bill. Will it seize the opportunity? In the end, it’s not one player who can save Philippine internet. It will take as many players as possible, through the initiative of Congress. The Filipino people are waiting and watching.

Categories: Government Regulations · Other Posts · Wireless

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