THE word war between provisional third telco player Mislatel consortium and disqualified bidder Sear Telecommunications Inc. has intensified, with the latter accusing its corporate foe of misleading the National Telecommunications Commission (NTC) and the general public with its franchise-related claims.
Raoul C. Creencia, the legal counsel of Sear, belied the claims of Mislatel that its deal with Digiphil Technology Inc. has already been terminated.
“Mislatel has no right to unilaterally terminate and rescind the agreement. Neither is there any legal and valid basis for such rescission or termination,” he said.
Digiphil, an affiliate of Sear consortium member TierOne Communications International Inc., earlier entered into an agreement with Mindanao Islamic Telephone Corp., the franchise holder for Mislatel, to provide telco services to unserved and underserved areas in the country.
Under the agreement, which was shared by Mislatel with the media, Digiphil bought 2.5 million shares in Mislatel for P5 million.
The agreement bore an exclusivity clause that read: “Mislatel warrants and represents that Digiphil and/or Digiphil nominated partners or business associates will be Mislatel’s sole and exclusive partner in the utilization of frequencies, permits, licenses or authorizations that may be approved through the applications or petitions mentioned herein.”
The contract also prohibited Mislatel from entering into partnerships with other companies for the same contract.
Udenna Corp., Chelsea Logistics Holdings Corp. and China Telecom Corp. Ltd. tapped Mislatel for the use of its congressional franchise for the third telco bidding.
Davao-based businessman Dennis A. Uy, who has close ties with President Duterte, owns and operates both Udenna and Chelsea.
Uy’s camp claimed on Sunday that Mislatel’s deal with Digiphil is limited to “small projects like very-small aperture terminal technology.”
Likewise, John D. Coluso, the legal counsel of Mislatel, said the deal has been terminated, sending the media a copy of a letter sent to Digiphil that demanded the revocation of the contract, citing Digiphil’s alleged “fraudulent misrepresentation” on the terms of the contract.
Specifically, Coluso said the provision on “other authorizations” under the contract does not include the third-telco bid participation of Mislatel with Digiphil.
However, Creencia found this claim ridiculous.
“Mislatel’s claim that there was a fraudulent misrepresentation is absurd. Mislatel cannot claim that Digiphil fraudulently misrepresented or concealed its intention to include bidding for new major player in the scope of the applications under the agreement,” he said.
Creencia claimed the contract clearly spelled out that the agreement between Mislatel and Digiphil “does not limit the scope of business ventures that the parties may engage; it includes those providing broadband, value added services, telecommunications, cellular mobile telephony, international gateway, voice-band data, other ICT-related services.”
He added that it also included “other services within the scope of Mislatel’s legislative franchise” including, “obviously,” the auction for the third telco license.
“The Digiphil and Mislatel agreement is categorical. The parties undertook to jointly venture into a business to provide, among others, telecommunications services and other information and communications technology services,” Creencia said.
He added: “Mislatel, therefore, cannot escape the otherwise clear terms of its agreement with Digiphil by trying to limit its scope.”
Mislatel, Creencia added, breached the agreement “and its false representations to the NTC are matters of record that no amount of denial can hide.”
“The NTC should not be swayed by Mislatel’s unilateral disavowal of what clearly are its contractual commitments to Digiphil. The people deserve to know the truth and the NTC must not fail them in this regard,” Creencia said.
Sought for comment, Coluso said Mislatel and Digiphil may eventually find themselves facing each other in court to settle the differences on the interpretation of the provisions of the contract, including its termination.
“It cannot be said that we do not have the right to terminate. If we terminate and they disagree, then it is now up to a third party like the courts to decide what the agreement was, and what the violations are. Eventually, the courts will decide,” he said via phone.
He, likewise, noted that the third telco auction is not included in the provisions of the contract, as the deal with Digiphil was made to “legalize its businesses,” as it “operates without proper license.”
“Our position is that while there was an agreement with Digiphil, and there is a provision on exclusivity, there is no mention at all in the contract about the bidding for the third telco,” Coluso said.
He explained: “This bidding is something so important such that if it were to be included, then the contract should clearly state it.”
“What’s clear is there was an agreement, but it didn’t include the bidding for the third telco,” Coluso said.
He also noted that Digiphil should be the one to negotiate with Mislatel for any noted discrepancy, as the agreement signed in May was between the two parties, and not with TierOne.
“In the meantime, the matter of declaration of new major player cannot be made to wait for who is right and who is wrong,” he said.
The telco regulator on November 7 proclaimed Mislatel as the provisional third telco, after it was left as the lone bidder that passed all the bidding requirements.
Sear submitted a defective bid, after failing to provide a bid bond that amounts to P700 million to participate in the auction.
Philippine Telegraph and Telephone Corp., on the other hand, was out of the running as its bid lacked a key requirement: a certificate of technical capability.
The two groups have since filed for separate motions for reconsideration.
Barring delays, Department of Information and Communications Acting Secretary Eliseo M. Rio Jr. said his group may officially award the third telco license this month.
Image credits: Nonie Reyes