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Philippines Selects Consortium Led by China Telecom for Third Telecom Provider

November 8, 2018

After two competitors were disqualified, the government of the Philippines selected the Milsaltel Consortium, a joint venture consortium including China Telecommunications Corp., Udenna Corp. and its subsidiary Chelsea Logistics Holdings Corp., and franchise holder Mindanao Islamic Telephone Company, Inc., (Mislatel), as the provisional winner for the lucrative third telecom provider slot in the Philippines.

The Philippine government under President Rodrigo Duterte had identified the need for advanced telecom competition in the country as a major economic force for change in the future. The country's telecommunications regulatory groups moved quickly to set up an aggressive competitive procurement to provide an alternative.

Currently there are two main providers in the country. One, PLDT, currently has a subscriber base of 59 million. A second, Globe, a business venture involving the local Ayala Group, has an estimated 67 million subscribers. Both have been strongly criticized for the slowness with which they have improved internet speeds in the country, and for keeping certain prices high. The effect has been to leave the country in the grip of what many see as a two-company duopoly.

The Mislatel Consortium which won the provisional selection committed to the following:

  • Covering 84.01% of the population with its service within five years
  • Providing average broadband speeds of 27 megabits per second (Mbps) in the first year of operation and 55 Mbps in following hears.
  • Total capital and operational expenditure of P257 billion (US $4.87 billion) during the first five years of operation

Two other bidders, LSC-TierOne and Philippine Telegraph and Telephone Corporation (PT&T) were disqualified.

Sear Telecommunications, Inc., the franchise holder for the consortium including the LCS Group of Companies and TierOne Communications International, Inc., (LCS-TierOne), and PT&T both were knocked out of the running because of lack of documents.

LCS-TierOne had an additional problem that it was not able to support the required “performance security” commitment of P700 million.

PT&T did not have a certification from the National Telecommunications Commission (NTC) demonstrating it had 10-years of national-level experience.

Other groups which had purchased bid documents for the opportunity decided not to bid. These included Converge ICT, Streamtech Systems Technologies, Inc., AMA Telecommunication Corp., Norway’s Telenor Group and Austria’s Mobiltel Holding GmbH.

The two disqualified consortiums have filed appeals to the selection committee. After those appeals are heard, the selection committee will submit a final winner recommendation to the NTC en banc. Then the NTC will declare the winner publicly. That is all expected to happen within the next month.




Copyright: North America Procurement Council Inc., PBC