DICT decries delaying entry of 3rd telco player after bidder sues NTC

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Department of Information and Communications Technology (DICT) Officer-in-Charge Eliseo Rio Jr.

Metro Manila (CNN Philippines, October 10) — The Department of Information and Communications Technology (DICT) slammed the firm vying to become the country's third telecommunications player over suing the National Telecommunications Commission. (NTC)

In a statement issued Wednesday, DICT Officer-in-Charge Eliseo Rio Jr. called out NOW Telecom's allegations of NTC institutionalizing a "money-making scheme" in its requirements for companies who wish to bid.

"The third telco must not only be technically capable, but more importantly have the financial muscle to compete with the giants, Globe and Smart. Is it to further delay the entry of the third telco?" Rio said.

The DICT chief said to bring the bar low for firms who cannot meet the standards set "is detrimental to the people who are the target beneficiaries."

Rio added NOW had 15 days to question the Terms of Reference (TOR) in which the requirements are listed down, and it only raised the complaint after having bought the Instructions to Bidders last October 8.

NOW filed the case on Monday at the Manila Regional Trial Court, citing that the guidelines set by the NTC can be declared "onerous, confiscatory, and potentially extortionary."

What do the fees mean?

Rio defended the securities mandated under the TOR, saying that these were consistent and even lower than the requirements under the Government Procurement Reform Act (Republic Act 9184).

"This is to attract possible participants while ensuring that the winner will be able to withstand intensive competition against the entrenched duopoly," it said.

NOW earlier pointed to three fees which were reportedly not tackled during public consultations on the TOR, including a ₱700 million "Participation Security", a ₱14 billion to ₱24 billion "Performance Security", and a ₱10 million non-refundable "Appeal Fee."

Rio said the participation security ensures the participation of serious contenders who have the required financial capability to be the third telco player in the country.

"The participant is given certain options on what form they wish to put up the security, e.g. cash, bank drafts or letters of credit," he said.

He also explained the performance security will assure the government that the firm vying for the third telco spot will deliver its commitments for the five-year period its it required to.

"The requirement for cash deposits have been removed and the participant has been given options as to the forms provided in the TOR," he said.

The DICT OIC added the appeal or protest free is a usual item in procurement.

"This is to discourage frivolous motions and protests," Rio explained.

The process of selecting the third telco player began on October 6 and will end on November 7, in line with President Rodrigo Duterte's earlier statement of having picked out the firm by November.