OSG intends to reject the petition challenging the third telco selection process


The Office of General Counsel (OSG) asked the court in Manila to dismiss the petition filed by NOW Telecom Co. Inc., which challenges the government process of choosing a third telecommunications player.

In a memorandum submitted on behalf of the National Telecommunications Commission (NTC), lawyer Jose Calida said that the petition NOW has no advantages.

In his petition, filed at Manila Regional Trial Court Branch 42, NOW challenges the key financial requirements that the NTC considered for the beginning third participants of the conference.

NOW refers to the imposition of a participant's security, performance security and appeal fee, as well as the requirement that the implementation plan be submitted 90 days after the selection of the new main player.

He now claims that he has no intention of interrupting the bidding process for the third telecommunications player.

Aldrich Fitz U. Dy, legal adviser NOW, said the telecommunications company would be willing to publish share securities and results, but would like securities deposited in court to be able to be heard in case the government wants to lose securities.

READ: Aspiring 3rd Telco player will not interfere in the gov & # 39; selection process

But Calida said that NOW's fear was unjustified.

"This fear [on a forfeited participation, performance and appeal fees] it is only a figment of the imagination of the NOW Telecom plaintiff and finds no basis in reality and almost "- said Calida.

"A court order can not be issued only because the reason of TER Telecom assumes that DTT may lose the security of participation without the possibility of being heard," adds Calida.

According to Calida, the terms of the Circular Memorandum No. 09/09/2018, which includes the security of participation, do not violate applicable regulations.

He shared this stance no less than the secretary of justice, Menardo Guevarr, who previously indicated that the scope of the tender procedures set by NTC is "lawful and does not violate any rights".

Calida pointed out that the P700 millionth security of participation, the P14 billion to P24 billion security of execution and the P10 million non-returnable cancellation fee were all necessary to determine the financial eligibility of the bidders, not the "money making system" or allegedly raised by the petitioner .

He stressed that the third telco should not only be technically capable, but should also have "financial muscle" to compete with the current telecommunications giants Globe and Smart.

According to him, such securities and imposed fees are consistent with the process of submitting offers and orders, and are even even lower than those specified in the Act on the reform of government procurement or in the Law of the Republic of 9184.

OSG explained that the security of participation is aimed at ensuring the participation of serious rivals who have the required financial capacity to be the third player who can compete with the existing duopoly.

The participant receives specific options regarding the form in which he wants to issue collateral, such as cash, bank statements or letters of credit.

On the other hand, safety of performance is intended to ensure the government that the third telecommunications operator will fulfill its obligations in the five-year settlement period.

The requirements for cash deposits have been removed and the participant has received options regarding the forms contained in the TOR.

Finally, NTC said the fee for appeal or protest is usually an element in public procurement processes, which discourages frivolous applications and protests.

OSG also denied NOW's claim that there was no prior consultation regarding the approval of the scope of requirements and obligations.

Calida said the mandate was "the result of public consultations and hearings, a review by the Supervisory Committee and long and comprehensive research with international consultants" and that "society and stakeholders also had the opportunity to make their views known".

In accordance with the final tendering rules issued by NTC, the successful tenderer will be selected on the basis of the highest approved level of service for a period of five years.

It sets three criteria – national population coverage of 40 percent, a minimum average broadband speed of 25 percent, and capital and operational expenses – 35 percent.

The regulations also provide that the minimum percentage of population in the first year should be 10 percent, and this figure should reach 50 percent in the fifth year.

It is expected that the new player will invest at least P40 billion in the first year and P240 billion in five years.

The selection panel will use a point system based on documents submitted by potential players.

After submitting offers, NTC will formally open the selection of offers for November 10. The government hopes to name the third telco before the end of this year.

NOW it is one of 10 companies and consortia that until now participated in the auction of the third telecommunications company and paid a fee for a share of 1 million.

Her parent company, Now Corp., generated operating income of only £ 6 million in 2017.

Up to nine other bidders include China's state-owned company China Telecommunications Corp., the Austrian company Mobiltel Holdings GmbH, Dennis Uy & # 39; s Udenna Corp., a joint venture of Chavit Singson & # 39; s LSC Group of Companies and TierOne Communications, the Norwegian Telenor Group, Philippine Telegraph and Telephone Corp. (PT & T), former Congressman Felizardo Colambo at AMA Telecommunications and two undisclosed companies.

Streamtech Systems Technologies Inc. former Sen. Manny & # 39; ego Villar, who has recently secured a franchise for himself, also reportedly joins the third telco auction. /ATM

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