3rd telco faces franchise trouble before House panel

Ralf Rivas
3rd telco faces franchise trouble before House panel
The House committee on legislative franchises tackles Mislatel's legal dispute with DigiPhil and its franchise problems

MANILA, Philippines – Legal matters led the House committee on legislative franchises to suspend its deliberations on the transfer and sale of the controlling interest of Mindanao Islamic Telephone (Mislatel).

The panel was set to approve the transfer on Monday, December 10, to the winning 3rd telco player consortium of Dennis Uy’s Udenna Corporation, Chelsea Logistics, and China Telecom.

Mislatel has the congressional franchise needed for the consortium to bid, while Uy and China Telecom have the capital and technical expertise to roll out telecommunication services on a national scale. (IN CHARTS: Udenna Corp-China Telecom’s promises)

However, Surigao del Sur 1st District Representative Prospero Pichay Jr urged the panel to look into the legal disputes Mislatel is facing, which he said may lead to more problems in the future.

Pichay cited the disagreement between Mislatel and DigiPhil, a company that is part of Chavit Singson’s Sear Telecom, which lost the bid due to its failure to submit participation security worth P700 million.

Sear Telecom insisted that Mislatel has an exclusive contract with DigiPhil and thus cannot be part of the consortium of Uy and China Telecom.

“This committee cannot approve a transfer of acquisition because there is a pending legal obstacle,” Pichay said.

Sear Telecom already filed a case regarding the matter, but Mislatel chief executive officer Nicanor Escalante told the committee that no such legal step was taken.

AKO Bicol Representative Alfredo Garbin Jr and Buhay Representative Lito Atienza insisted that the corporate dispute is not a concern of the House panel.

Garbin said they should only focus on whether the transfer of controlling interest would be compliant with the 1987 Constitution’s 60-40 rule on ownership and would not compromise national security.

All other matters, the two said, were beyond the committee’s concerns and should be directed to other government agencies.

Meanwhile, 1-SAGIP Representative Rodante Marcoleta questioned why Mislatel was unable to operate a year after it was granted a franchise in 1998. 

Escalante said they were only able to operate in 2015 in Maguindanao due to security threats.

“Based on your own admission, you commenced ops in 2015…. Then your franchise is revoked based on the law,” Marcoleta said.

The disagreements among the members of the House committee led to the suspension of the deliberations.

The panel will continue deliberations on Tuesday, December 11.

The issues of the 3rd telco player were also tackled by the Senate last November, where Senator Grace Poe sought clarity on cybersecurity concerns.  Rappler.com

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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.