LIST: Companies vying for Philippines’ 3rd telco spot

Ralf Rivas
LIST: Companies vying for Philippines’ 3rd telco spot
At least 7 foreign and 5 local companies are gunning to be the next major telco player

MANILA, Philippines– The Department of Information and Communications Technology (DICT) said there are at least 7 foreign companies interested in becoming the country’s 3rd telecommunications network provider.

On the sidelines of the public consultation for the 3rd telco’s terms of reference on Thursday, August 23, DICT Secretary Eliseo Rio identified the companies as the following:

  • China Telecom (China)
  • KT Corporation (South Korea)
  • LG U+ (South Korea)
  • Vittel (Vietnam)
  • Telenor (Norway)
  • AT&T (USA)
  • KDDI Corporation (Japan)

China Telecom, the biggest among the contenders, raked in a whopping $27.05 billion in earnings in 2017.

To break the duopoly of PLDT and Globe, foreign companies need to team up with local firms.

The 1987 Constitution states that Filipinos must own 60% of a telecommunication company, with foreign ownership limited to 40%.

The following local companies are aiming to claim the coveted slot:

  • PT&T
  • NOW Corporation
  • Converge
  • Transpacific Broadband Group International (TGBI)
  • TiereOne

PT&T President and CEO James Velasquez said they are ready to submit their proposal. 

“We have been preparing to bid maybe 6 months ago. I think we are just waiting for all this to move forward,” Velasquez said.

Local companies must be able to commit at least P40 billion to P130 billion for capital expenditures for them to get the slot. (LOOK: DICT draft rules on selection of 3rd telco player)

When asked how PT&T will raise the funds, Velasquez said the money may not necessarily come from the foreign partner. 

“There are many ways of funding, there’s opex [operational expenditure] management agreement,” Velasquez said. 

He also said PT&T is open to access the capital markets once again for the deal to push through.

The firm listed at the Philippine Stock Exchange (PSE) in 1990, but voluntarily suspended trading its shares in 2004 as it was unable to meet the local bourse’s requirements.

Meanwhile, shares of Easycall, TGBI, and NOW have been soaring amid talks of teaming up with foreign firms.

Dennis Uy’s Chelsea Logistics was previously reported as being in talks with foreign companies to expand in the telecommunications space. (READ: How to grow a business, according to Dennis Uy)

Adel Tamano, spokesperson of Udenna Corporation, another company of Uy, was present during the forum and questioned the “low” operational expenditure requirement of DICT.

When asked by reporters whether Uy’s group would participate in the bid, Tamano handed out a statement.

“While the terms of reference for the bidding have not yet been finalized, any discussion on whether or not Udenna Corporation will actually make a bid fore the NMP [new major player], as well as potential partnerships with foreign or local companies, would be both premature and speculative,” the statement read.

President Rodrigo Duterte wanted the next player to be up and runnung by the first quarter of 2018. However, the DICT is now aiming for December of this year to name the bid winner.

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.