Philippines opens bid for final 3G license

Government releases bidding rules for fifth license for 3G mobile services, setting reserve price at US$1.4 million and amid protests from market players.
Written by Joel D. Pinaroc, Contributor

The Philippine telecom regulator has initiated the auction process for the country's fifth, and final 3G license, albeit amid protests from telecom operators.

In a memorandum circular released earlier this month, the National Telecommunications Commission (NTC) said telecom operators keen to bid for the 3G license must submit their applications to determine if they are eligible to participate in the bidding process.

The NTC set the minimum bid price for the annual spectrum user fee at 65 million pesos (US$1.4 million). In addition, the winning bidder must pay a performance bond "equivalent to 30 percent of the rollout cost for the first two years but not below 1 billion pesos (US$21.8 million)", for five years or upon completion of the service rollout.

The telecom regulator added that "qualifications, such as--but not limited to--track record when applicable, rollout plan and financial soundness as a means to foster competition", would be considered.

However, the bidding exercise has drawn criticisms from industry players.

The NTC had previously earlier assigned 3G frequencies to companies it deemed qualified to roll out the services but later revised the rules, drawing flak from operators.

Dominant operators Smart Communications, Globe Telecom, Connectivity Unlimited Resource Enterprise (CURE) and Digitel Telecommunications Philippines, were granted 3G licenses back in 2005.

The most vocal among the operators is Bayan Telecommunications (Bayantel), which is currently involved a suit contesting that the NTC recognize the carrier as the rightful holder of the last 3G slot, as it had qualified under the previous rules stipulated by the regulator.

Bayantel expressed its dissatisfaction with the NTC's plan to invite bidders, particularly Schutzengel Telecom, a newcomer in the Philippine telecom space that had reportedly submitted an application for the fifth license.

Bayantel and more recently Smart, have both petitioned for the NTC to block the entry of Schutzengel, citing that the newcomer may not have the resources to support 3G services in the Philippines.

Joel D. Pinaroc is a Filipino freelance IT writer currently based in Saudi Arabia.

Editorial standards