Duterte grants franchise to Villar-owned telecom systems

MANILA, Philippines (UPDATED) – President Rodrigo Duterte granted the Villar family’s Streamtech Systems Technologies Inc a 25-year franchise to construct and operate a telecommunications system throughout the Philippines.

SST is a venture of the group of companies owned by tycoon Manuel Villar which in April announced plans to get into the telecom industry.

The franchise, granted through the signing of Republic Act No 11089 on October 18, allows SST to maintain for commercial purposes an “international gateway facility” to connect the Philippines to other countries.

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This system includes “wireless telecommunications systems, international and national broadband system, mobile and cellular, including but not limited to fiber optics, multichannel multipoint distribution systems,” among other features.

SST can now secure a Certificate of Public Convenience and Necessity from the National Telecommunications Comission (NTC). The NTC must authorize SST’s use of a frequency in the radio spectrum.

Under the Villar group's initial plan, SST was intended to provide fixed broadband services to homeowners of communities being developed by Vista Land, the group's property development firm.

Vista Land owns the Camella brand, as well as Starmalls Incorporated and Golden Bria Holdings Incorporated.

Duterte’s granting the franchise comes as his administration promised a third telecommunication player to break the duopoly of Smart Communications and Ayala's Globe Telecom.

A scion of the Villar family, Mark Villar, sits in Duterte’s Cabinet as public works and highways secretary. At the start of his presidency, Duterte shrugged off concerns on Villar’s conflict of interest.

Villar himself said in an interview after accepting the Cabinet post: ”We cannot benefit from my position in any way, shape, or form. I will not allow it.”

The 1987 Constitution states that Cabinet members must "strictly avoid conflict of interest in the conduct of their office."

It also orders that they "shall not, during said tenure, directly or indirectly, practice any other profession, participate in any business, or be financially interested in any contract with, or in any franchise, or special privilege granted by the Government or any subdivision, agency, or instrumentality thereof..."

Conflict of interest issues also arise in the case of Senator Cynthia Villar, mother of Secretary Villar and wife of tycoon Manuel Villar.

Any franchise approval requires the greenlight from both houses of Congress before arriving at Duterte's desk for his signature. 

The 1987 Constitution prohibits a senator from being financially interested "directly or indirectly" "in any contract with, or in any franchise or special privilege granted by the Government, or any subdivision, agency, or instrumentality thereof...during his term of office." – Rappler.com

Pia Ranada

Pia Ranada covers the Office of the President and Bangsamoro regional issues for Rappler. While helping out with desk duties, she also watches the environment sector and the local government of Quezon City. For tips or story suggestions, you can reach her at pia.ranada@rappler.com.