By Lara Climaco i FilAm Star Correspondent

The much-awaited bidding for the third telco slot in the Philippines has been set for November 5, the Department of Information and Communications Technology (DICT) announced last week as it released the final guidelines on the selection process.

The memorandum circular (MC) containing the guidelines was signed by the three incumbent commissioners of the National Telecommunications Commission (NTC) and affirmed by DICT Acting Sec. Eliseo Rio Jr. on September 20, nine days after President Rodrigo Duterte threatened to take over the process if there is no progress by early November.

“The MC will be effective 15 days after its issuance or 6 October. Bidding documents can then be secured a week after from the NTC and will be given until 5 November to submit their bid,” DICT said in the announcement posted on its website.

“Drastically improved through multiple public consultations and by consulting various agencies, the MC that uses the Highest Committed Level of Service (HCLoS) approach will be the basis on determining the NMP [New Major Player]. The NMP is expected to be identified on December 2018,” it added.

Last September 18, Rio formally revised the qualifications for the NMP, raising the required experience to “10 years on a national scale” and changing the cut-off date for uncontested outstanding liabilities to Oct. 1, 2018. These were pegged at five years and January 2018, respectively, in earlier drafts of the NMP guidelines. Rio’s memo also identifies HCLoS as the official criteria, replacing an earlier guidance that the entity with the highest committed investment would be chosen.

These changes are reflected in the final and official guidelines issued by the NTC, which recognizes operations in foreign countries in determining technical capability. Over a commitment period of five years, the guidelines peg the minimum capital and operational expenditure at PHP 450 billion for 50 percent population coverage of at least 5Mbps of broadband service. The maximum prescribed capital and operational expenditure has been pegged at PHP 950 billion over the five-year commitment period, to cover 90 percent of the national population with 55Mbps broadband speed.

According to the guidelines, bidders may quote expenditures, coverage and speeds that are higher than the prescribed maximum but this won’t bring them additional points. Under the HCLoS point system adopted by the NTC, 40 percent weight will be given to national population coverage, 25 percent to the minimum average broadband speed, and the remaining 35 percent based on the capital and operational expenditure quoted by bidding participants.

Participants’ points will be computed annually at escalating values over the commitment period. For instance, for every PHP 10 billion of cumulative capital and operational expenditure over the prescribed minimum for each year, a participant will receive 3.5 points per year. In terms of national population coverage (NPC), one point per year is given for every 1 percent over the minimum NPC up to the maximum NPC for each year. The minimum NPC for Year 1 is pegged at 10 percent and the maximum at 50 percent. The values increase by 10 percent every year to reach the Year 5 minimum of 50 percent and maximum at 90 percent coverage. For broadband speed, points accumulate for every whole 2Mbps over the minimum speed of 5Mbps, but only up to the cap set at 55Mbps.

Overall, the guidelines favor a rapid network roll-out, providing premiums on the second and third year scores. For the fourth and fifth years, scores are only multiplied by 70 percent and 60 percent in contrast to Years 1, 2 and 3 at 100 percent, 140 percent and 130 percent, respectively.

A bond of PHP 700 million is required just to participate in the bidding, on top of the PHP 1 million fee for acquiring official bid documents. Binding for 180 days, the participation security will be forfeited if the concerned participant submits false information or falsified documents, refuses to accept its confirmation as the selected NMP, unjustifiably withdraws from the bidding or “attempts to unduly influence the outcome of the selection process.”

Based on the guidelines, the selection process will continue even if only one participant submits a bid but the designated NMP Selection Committee would still evaluate the bid based on the guidelines.

“Nothing in this MC shall prevent the NTC En Banc from exercising its right to terminate the NMP selection process at any time, for justifiable and necessary reason, in which event, the NTC shall not be liable for any claims, whether administrative, civil or criminal in character.

The NTC En Banc reserves the right to reject any or all proposals, waive any minor defects therein and accept the offer it deems most advantageous to the government,” it said on Section 9 of the MC.

The selected NMP must post a performance bond worth 10 percent of its total committed expenditures and maintain it at that level for the remainder of the five years. It will be authorized to operate its telco facilities for at least 15 years.