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Chinese telcos, U.S. tech firm eye entering PH telco market

MANILA, Philippines – Three Chinese telecommunications firms and an American technology company expressed interest in entering the Philippine telecommunications market through the regulators' planned auction of surrendered and recalled spectrum frequencies this year.

National Telecommunications Commission (NTC) Commissioner Gamaliel Cordoba said on the sidelines of an event in Quezon City on Tuesday, February 14, that for the spectrum bidding planned in 2017, representatives of some foreign players have visited his headquarters to inquire about the auction.

"Those who expressed interest before (Dennis Uy's Converge ICT Solutions Incorporated and Mel Velarde's Now Telecom). There are also companies abroad going to our office. They don't want to be named yet. Only their representatives came to ask about the 60-40 restriction," Cordoba told reporters when asked which firms have expressed interest.

"They still have to look for partners. So far, 3 Chinese telco companies and a US technology [firm]. They have to check if the 60-40 rule is okay," he said in Filipino. (READ: San Miguel selling telco assets to PLDT, Globe)

Under the 1987 Philippine Constitution, only companies owned at least 60% by Philippine nationals or corporations may operate as a public utility. 

To enter the local telco market, these foreign firms will need to partner with Philippine corporations and utilize spectrum frequencies, which the NTC is planning to bid out within the year.

Although details of the spectrum auction have not materialized yet, Cordoba said those that will be bid out are the surrendered frequencies from San Miguel Corporation and the 10 megahertz (MHz) 3G frequencies of Connectivity Unlimited Resources Enterprise (CURE) from PLDT Incorporated.

List of unutilized spectrum out soon

These will be bundled by the frequencies that the NTC has yet to recall from companies not "utilizing and/or paying for their allocation." (READ: The future of 700 MHz band remains unclear)

According to Department of Information and Communications Technology (DICT) Undersecretary George Sarmiento, the NTC is set to publish the "list of assigned and unassigned frequencies this week."

Sarmiento said the list will include firms which have not been paying fees for the spectrum allocation and those who are not using the assets.

Cordoba said these firms will first be informed of the impending move.

"They have to pay and/or they have to use. If not, we will recall. But first, we will write them. They can just question it in courts," he said.

"We will put together all the recalled frequencies with those that were surrendered from us. Then we will auction off. The rule is if two or more [companies] vie for assignment, you have to do a legal tender," the NTC chief added.

He said the NTC is working with the World Bank to come up with the terms of reference for the spectrum auction.

The NTC is planning the auction to entice a 3rd major player into the country's telecommunications sector, challenging PLDT and Globe Telecom, which have been under fire for costly and slow internet services.

In July 2016, 5 small local players entered the Philippine telco industry after their franchises were approved by Congress and lapsed into law. (READ: Avocado, 4 new players enter PH telco industry) – Rappler.com