In his recent State of the Nation Address, President Duterte pledged to bring in a new telco player to stir up competition and ensure that the country’s telecommunications services are reliable and inexpensive. The President said: “A draft terms of reference for the entry of a major industry player is at hand. The terms will be fair, reasonable and comprehensive. It will be inclusive, so it will be open to all interested private parties, both foreign and local. The only condition is that the chosen entity must provide the best possible services at reasonably accessible prices.”
The Department of Information and Communications Technology and the National Telecommunications Commission (NTC) are currently working hard to fulfill the mandate given by the President who wanted a third telco player named by December. The DICT said it has adopted the highest committed level of service as the mode of selection for the new telco player. This means the prospective participant with the highest points gained on the basis of coverage (40 percent), speed (20 percent) and financial capability (40 percent) in the next five years would be named as the new telco player.
With the removal of a big stumbling block, the selection process can now smoothly proceed, according to NTC Commissioner Gamaliel Cordoba, who reported that the problem over the 3G frequency won by Bayan Telecommunications Inc. in 2005, contested by the other players, has been settled after the contenders for that frequency have agreed to withdraw their petition.
The NTC, an attached agency of the DICT, exercises jurisdiction over the supervision, adjudication and control over all telecommunications services in the Philippines. To pave the way for the entry of a third telco player, it reduced the interconnection rates for both short messaging services and voice calls. This means telcos will now charge 50 centavos per minute for voice calls from P2.50 per minute, while the new rate for text messaging will be at 5 centavos per text message from 15 centavos, according to NTC Memorandum 05-07-2018 dated July 19, 2018. The order is in compliance with Department Order 002-2018 of the DICT, which directed the NTC to craft measures that will ensure lower interconnection rates for both mobile voice and SMS being offered by telcos.
Cordoba, who also worked for the extension of the expiration period of prepaid loads to one year in cooperation with the DICT and the Department of Trade and Industry, said they are trying to solve other barriers that could discourage the entry of a new telco player, which include long processing time of permits from local government units and the lack of uniformity in processing fees among LGUs. With the President’s backing, however, he is optimistic that a third telco player will soon be chosen to buoy competition, and thus drive significant improvements in cost and quality of service.
President Duterte said he wanted a new telco player to compete with incumbent players to provide more options and better services to consumers. And the DICT and NTC are acting expeditiously on the matter. The selection of a third telco in December will be a good Christmas gift by the Duterte administration to 100 million Filipino customers who feel the incumbent telcos have done too little to address network issues, especially on Internet speed and quality.