DICT: 3rd telco player to be chosen based on committed service

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Metro Manila (CNN Philippines, July 20) — The next major telecommunication player will be chosen based on the highest committed level of service, an official said.

Department of Information and Communication Technology Officer-in-Charge Eliseo Rio Jr. said the government oversight committee has agreed on Friday to use the approach in selecting the country's third telco player, dismissing the auction method.

However, Rio noted that the Department of Finance had some concerns in implementing the approach.

The committee is composed of the DICT, DOF, Office of the Executive Secretary, and Office of the National Security Adviser.

Instead of an auction, he added that the group is looking into the possibility of generating revenue through the spectrum user fee or SUF.

With the highest committed level of service - or HCLoS for short -  the third player will put its money on its commitment.

It will be chosen based on a point system, wherein corresponding points will be given for internet speed and coverage--which should be greater than that of what existing companies provide--as well as for spending.

"'Yung financial roll out naman that is where they can make a commitment and they will earn points," he said. "The higher their commitment for financial roll out, the higher points they have."

If all issues will be resolved by the end of July, the terms of reference may be laid out by next month.

The third telco may also be named by December this year and can go fully operational by 2019 should the selection process go smoothly.

WATCH: The search for the country's third major telco player

The chosen telco will also be subject to a five-year observation and assessment by the DICT.

A performance bond equivalent to 40 percent of the financial roll out  from the third player will also be applied. This means that if the chosen player fails to deliver its commitments, DICT can take back the frequencies and forfeit the performance bond.

"Ito ang assurance namin that the third player will (have) some commitment that were never done or never asked from Globe and Smart because we want the third player to have a standard that can bring our telecomm industries at par with our neighbors," Rio said.

'Yun na lang hinahabol natin at least nasa gitna man lang tayo hindi nasa huli," he added.