DOF: New telco player needs an estimated P200B to compete

MANILA, Philippines — A new challenger in the country’s wireless communications industry should prepare a P200-billion war chest to compete with incumbents PLDT Inc. and Globe Telecom Inc., the country’s Finance chief said on Thursday.

“To effectively compete, the investments required of the new major telecommunications player is estimated to be at least P200 billion,” Finance Secretary Carlos Dominguez III tweeted.

To break a longstanding duopoly and improve services, President Rodrigo Duterte invited foreign firms, backed by a consortium of Filipino businesses, to take a role in the country’s telecom market.

The Department of Information and Communications Technology last February said it might remove the P10-billion net worth requirement for interested companies, after potential entrants complained that the rule “eliminates players” that can compete with Globe and PLDT.

Under the revised policy guidelines issued by the DICT last April 13, applicants must have paid-in capital of at least P10 billion “to prove financial capability.”

The company with the highest committed investment and level of service for the next five years will be selected as the new telecom provider.

“The magnitude of the investment requires that all elements, including the necessary access to available telecommunications infrastructure, are in place for the new player. Until such time, the bidding for its entry cannot be rushed,” Dominguez said.

DICT Officer-in-Charge Eliseo Rio Jr. earlier said his department has a “self-imposed timeline” of choosing the industry’s new telecom carrier before Duterte delivers his next State of the Nation Address in July.