The Road to Third Major Telco (PART 3: the legislative pipeline, and why a slight delay is not so bad)

There are ICT reforms in the pipeline that have a direct impact to the third telco initiative.

In our previous two columns, we talked about the threats and weaknesses hindering the release of the Terms of Reference (TOR) of the third telco initiative. While the news of the delay can be cause for some disappointment, there are some fortuitous effects of the delay.

The news is not all bad.

Opportunities

ICT advocates have been active in the push for reforms in the legislature, Democracy.Net.PH being one of the groups at the forefront of ICT advocacy, alongside the Better Broadband Alliance and the Internet Society – Philippine Chapter (ISOC-PH). Through their efforts, a lot of improvements and reforms have been pushed and are nearing completion in just over two years of this administration.

There are ICT reforms in the pipeline that have a direct impact to the third telco initiative. Here is a list of these reforms that ICT advocates such as Democracy.Net.PH have been working on closely with legislators, what their effects to the third telco initiative are, and their status in the legislative mill:

The first four bills mentioned above, if given due consideration by the legislature, have a chance of passage before the State of the Nation Address (SONA) of the President. With enough diligence on the part of Congress, these bills can even be passed before end of April, and can be used to attract more foreign and local bidders for the planned late June or early July target. The fifth bill, spectrum management, can be passed within the year if the President agrees with the DICT’s plan, and can bring in even a fourth, fifth, or more full-service player before the President’s term ends in 2022. Of side interest is that spectrum auctions through proper spectrum management has the potential for earning billions of pesos that can be earmarked for the administration’s various infrastructure programs and its “Build Build Build” drive.

These bills have been on the radar of various foreign players expressing interest in the Philippines, the most recent of which is Viettel of Vietnam.vi A telco with already 90 million subscribers in 10 countries, if Viettel enters the Philippines and grabs a third of the market, Viettel would have a total of 120 million subscribers by just adding one country. The point is this. the Philippines’ population, growth potential, and economy are sufficient “sweeteners” for foreign players to come in and bid aggressively. The potentially advantageous policy environment (if and when these laws are passed) is just icing on the cake.

As such, the slight delay allows interested foreign players more time to do due diligence. Sources have informed various advocates and interested parties that at least one of the top law firms in the country has been engaged to perform due diligence on select legislative franchise holders and local major conglomerates on behalf of at least one foreign telecommunications company or group. The results have been described as “promising” and “attractive”, and there is enthusiasm among interested foreign players in pushing forward with becoming a bid partner and/or major investor.

However, adopting the highest committed investment (HCI) model instead of the highest committed level of service (HCLOS) model can very well prevent the Philippines from selecting the best choice for the Filipino people.

The TOR is up in the air, there is a slight delay – we ought to maximize this time we have available and make sure we get the TOR right. The President should approve the adoption of the HCLOS model and make all opportunities to pass these ICT reforms measures quickly. The country wins.

(Next up: Strengths)


 

vi "Vietnamese firm interested in 3rd telco bidding." ABS-CBN News. http://news.abscbn.com/business/03/19/18/vietnamese-firm-interested-in-3rd-telco-bidding

 

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