Japanese telco interested to be third player in Philippines, DICT chief says

January 14, 2018

The Japanese second largest telecommunications company has expressed interest to be the third telco player in the Philippines, an official said.

In a radio interview on Saturday over a state-run radio station, Department of Information and Communications Technology Officer-in-charge Eliseo Rio Jr. said that KDDI Corp. has expressed interest to invest in the country.

"The one which is interested to invest here is their (Japan's) number two, KDDI, the second biggest telecommunication company," he said.

But he added that KDDI has to look for a Filipino partner as foreign companies are only allowed by the Philippine Constitution of up to 40 percent ownership.

"But they are very much interested and in fact they are seeking help with the department to find or to partner with a Filipino telco," Rio added.

He noted that the Nippon Telegraph and Telephone Corporation or NTT, the largest telco firm in Japan, has long been a partner of Manuel V. Pangilinan-led Philippine Long Distance Telephone Co. (PLDT).

President Rodrigo Duterte earlier offered China to be the third telco player to improve the services, which are being monopolized by Globe Telecom and PLDT.

But some quarters have raised security concerns with China, particularly with the state-owned China Telecom, as the third player.

According to Presidential Communications Operations Office Secretary Martin Andanar, South Korean conglomerate, LG Corporation, has also expressed interest to partner with Philippine Telegraph & Telephone Corp. (PT&T) to be the third telco player.

Rio said a Taiwanese telco company is also keen to invest in the Philippines.

Duterte has ordered DICT to fast-track the entry of a third telco player by first quarter of this year.

Rio said the third player could immediately fill in the fixed-line internet to improve the services.

Under Republic Act No. 10929, otherwise known as the "Free Internet Access in Public Places Act," he said the government alone needs to provide free wi-fi access.

"We are targeting 260,000, so it's a huge market," he said.

With several foreign companies expressing interest to invest in the telco industry, Rio said one of the criteria in choosing the third player will be the financial plan.

"So whoever could give the best financial plan for five years...your present asset plus your financial plan for five years minus your liabilities, whoever is the highest can win," he said.

Rio said his office has already issued a memorandum order to the National Telecommunications Commission last January 8 to start drafting the terms of reference for the frequencies that will be awarded to the winning bidder.

The TOR is expected to be finalized by February 19 and those interested to join in the bidding will be given more than a month to come up with their own organization, with their financial plans and their foreign partners, he said.

By third week of March, he said the DICT expects the sealed proposals. Celerina Monte/DMS