House panel summons DigiPhil officials to explain contract with Mislatel

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Metro Manila (CNN Philippines, December 10) — The House Committee on Legislative Franchises said it wants officials of a losing third telco bidder to explain its deal with Mislatel amid claims of a breach of an exclusive contract.

The panel invited officials of DigiPhil Technology to appear at a hearing scheduled on Tuesday to explain its contract with Mislatel. DigiPhil is a subsidiary of Chavit Singson-led TierOne that formed SEAR Telecommunications consortium with foreign companies for the third telco bidding in November.

SEAR, which was disqualified from the bidding for lack of a "participation security" worth ₱700 million, accused Mislatel of breaching its existing contract with DigiPhil.

READ: Mislatel refutes SEAR Telecoms’ claims, defends franchise

But Mislatel said it already terminated its contract with Digiphil before the bidding for the third telco happened in November.

Surigao del Sur Representative Prospero Pichay, however, claimed the contract between two companies remains in place since there's no court order yet on its termination.

"An agreement, only the court can terminate an agreement except when there is a mutual agreement," Pichay said.

"There are certain provisions that Mislatel didn't follow. Mislatel disregarded this agreement and under the Constitution, prior rights has to be respected. Digiphil has already acquired prior rights by this agreement, so this committee cannot approve a transfer of acquisition because there is a pending legal obstacle," the lawmaker added.

Meanwhile, the Securities and Exchange Commission said it is still checking the nationalities of the members of the consortium to which Mislatel is selling its franchise.

Mislatel formed a consortium with businessman Dennis Uy's Chelsea Logistics and Udenna Holdings Corporation, and China Telecom to participate in the bidding for the third telco.

Mislatel was declared as the provisional winner of the bidding on November 7 and was confirmed as the country's third telco player on November 19. The following day, the group signed an agreement with the government.

Mislatel said it planned to operate by late 2019 or early 2020 and vowed to provide 27 megabits per second of internet speed in its first year.