THE government has released the latest draft of the new terms of reference for the selection of the third telco player in the Philippine market, noting three salient criteria that need to be met at the minimum to qualify for such.
Based on the latest draft terms posted in the web site of the Department of Information and Communications Technology (DICT), the selection criteria will be composed of a five-year commitment on population coverage, minimum average speed, and annual capital and operational expenditure.
For national population coverage, third telco bidding participants should target to cover at least 30 percent of the population per year. This will be based on the 2015 population count on a per-barangay basis.
Its services should also have a minimum average broadband speed of 5 Mbps and a P40-billion capital and operational expenditure program annually.
The participants will be weighted on a point basis, taking into account their committed services and capital levels for each year, the document read.
For the population coverage criterion, which accounts for 40 percent of the whole selection criteria, a point will be awarded to the bidder for every 1 whole percentage point in excess of the minimum 30 percent per annum. The maximum commitment per year is capped at 70 percent.
In terms of speed commitment, half a point will be awarded to a participant for every 1 Mbps of speed over 5 Mbps. The maximum speed commitment is limited to 45 Mbps per year.
Every P2.25 billion in excess of the minimum capital expenditures will be awarded a single point. The maximum committed capital is set at P130 billion per annum.
“A participant’s annual point score shall be multiplied by the corresponding weightage … reflecting the government’s policy priority of encouraging network rollout and difficulty of deploying the new major player’s networks and facilities in the shortest possible time,” the document read.
For the first year, weightage is at 100 percent; it will be raised to 140 percent in the second year; and will be reduced to 130 percent in the third; 70 percent in the fourth; and 60 percent in the fifth year.
The minimum national population coverage at end of the fifth year is at 50 percent of the population, the document read.
The selection process will be overseen by a committee composed of four members from the regulator.
The National Telecommunications Commission (NTC) shall award a 15-year certificate of public convenience and necessity to the winner. It shall be issued upon the approval of the Philippine Competition Commission, the compliance of the P10-billion paid-up capital, the approval of sale or transfer of capital stock by Congress, and the submission of the performance security and business plan.
The performance security, given to the NTC, should be equivalent to either 10 percent as cash bond or 30-percent surety bond of the annual budgeted capital and operational expenditure commitment of the company.
It should also deposit with the Land Bank of the Philippines 20 percent of the committed annual capital and operational expenditure within 60 days from the start of each year. The amount can only be withdrawn after the company has spent 30 percent of its committed budget.
The third telco should be able to roll out its plans within 90 days of its receipt of the notice of its deflation as the new major player.