10 firms eye partnering with TransCo for telco entry

MANILA, Philippines – A total of 10 firms have expressed interest to partner with the National Transmission Corporation (TransCo) to pursue a venture into the Philippine telecommunications industry.

TransCo earlier said it wants to diversify into telecommunications and compete with giants PLDT Incorporated and Globe Telecom Incorporated.

Since then, TransCo President Melvin Matibag said “many [companies have] called, [as well as] sent letters, text, and email.”

TransCo is the state-run firm that holds the country’s transmission assets. (READ: How PH’s top antitrust official is guarding market competition)

“They are offering to partner with us. They are local and foreign firms, mostly foreign from Japan, China, Indonesia, and [the] US,” said Matibag, who added that the government intends to retain a majority stake in the possible partnership. 

“Right now, what I am thinking is we will not be a minority in this. We may just give the operations and management to them,” Matibag added.

Although the TransCo chief declined to divulge the names of the companies, he hinted that the firm from Japan is the “the 3rd largest telco” player, while the one from Indonesia is “engaged in [the] cable” business.

Matibag said there are also a number of Chinese telecommunications companies that have expressed interest in partnering with TransCo.

PT&T ‘wants to lease’

Matibag also said local carrier Philippine Telegraph and Telephone Incorporated (PT&T) wrote TransCo, signifying its interest to enter into a lease agreement with the state firm. TransCo’s cable wires can be used to offer a wide range of broadband services, he said.

“PT&T wrote us a letter, but the letter of PT&T is to lease. However, our plan now is not to lease,” said Matibag.

“What we want to develop is telco. Anyone can come into the framework that we are crafting because what we intend is to get the congressional franchise in order to operate a full telco business.”

The TransCo president said he would formally submit his proposal to Congress within the month, probably in the 3rd week.

He is optimistic that majority of the lawmakers would sponsor a bill on this. “Many have volunteered to sponsor it. I am hoping that after the recess this matter would be taken up. I will also write to the secretary because this may be certified as urgent.”

The 10 firms, according to Matibag, will be asked to submit their respective project concepts.

“Some experts in telco are saying that only the government can compete with the two telco giants. No one else can come in. So, if it’s government combined with somebody that has the technical and financial capabilities to do it then here comes a 3rd player,” he added.

TransCo was created under Republic Act (RA) No. 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001.

Since March 1, 2003, TransCo has operated and managed the power transmission system that links power plants to electric distribution utilities nationwide.

EPIRA also mandated the privatization of TransCo through an outright sale or management concession agreement.

Following a public bidding conducted in December 2007, the TransCo concession was awarded to the National Grid Corporation of the Philippines (NGCP), which eventually secured a congressional franchise to operate the transmission network through RA No. 9511.

TransCo turned over the management and operation of its nationwide transmission system to the NGCP in January 2009.  

Ownership of all transmission assets, however, remains with TransCo. – Rappler.com