New telco players not likely to qualify for 3G – NTC

MANILA, Philippines – In the upcoming auction of an available 3G frequency, new entrants to the telecommunications industry may not qualify, an official of the National Telecommunications Commission (NTC) said.

In an interview with reporters, NTC deputy commissioner Carlo Jose Martinez said the terms of reference for the 3G frequency that was awarded then recently returned by the Connectivity Unlimited Resource Enterprises, Inc. (CURE) will be finalized soon.

Up for grabs is the 10 megahertz (MHz) 3G frequency of CURE, a former unit of Philippine Long Distance Telephone Co. (PLDT) that was given up following its 2011 purchase of Digital Telecommunications (Digitel), is being eyed by other players, including Ayala-led Globe Telecom Inc. and San Miguel Corp.’s telecommunications units.

“We have already identified the main qualifications for the bidder. Some minor details are not yet finished. This is just a draft which I think could be finished this week or next,” Martinez said.  

He added that the interested bidder must already hold a congressional telco franchise and has the financial capability to undertake such a capital intensive telco service offering.

“A new entrant may not have a good background to speak of simply because it is new to the business. We don’t want to risk that and someday learn that this new entrant, presumably it will in the auction, had sold the frequencies to someone else,” explained Martinez.
 
The NTC, he said, will also allow telco units or subsidiaries to participate in the auction.  

Martinez said the NTC will permit Globe Telecom, Inc. and its wholly-owned subsidiary Innove Communications Inc., to both participate in the bidding. Likewise, telco firms affiliated with conglomerate San Miguel Corp. can all push for their respective bids.
 
“For as long as PLDT and its units or affiliates do not participate, we will allow all telco firms to join the bid,” said Martinez.
 
“There will be a date once the TOR is issued,” he said, referring to the terms of reference for the bidding, which will likely happen in January 2013.

Bid floor price

One of the key items in the TOR is the bid floor price since part of that amount will be paid back to PLDT.

PLDT had said that the 3G should fetch a minimum bid price of P2.125 billion — higher than the P1 billion initial amount being considered before.

PLDT said this proposed amountalready includes the total cost of equity investments in CURE; advances from unit Smart Communications Inc. for operating requirements; advances from stockholders and; associated funding costs.
 
“They have already submitted their financial report that will serve as basis to determine the net worth of CURE,” said Martinez, adding that the commission may tap a third party to assist the agency in the valuation. “We may ask the Commission on Audit to help us or an accounting firm. There is still time to do all of these.” – Rappler.com