DICT warns frequency auction will ultimately benefit Globe-PLDT duopoly
A proposal to bid out frequencies to select the third telco player may turn out to be beneficial to industry giants PLDT Inc. and Globe Telecoms, the Department of Information and Communications Technology said.
DICT explained why auctioning off frequencies would solidify the PLDT-Globe duopoly.
“Some argue that auctioning the frequencies in selecting the new major telco player would be beneficial to the Filipino people for it would monetize the spectrum that they own. Yes, the highest bidder will put upfront billions of pesos to be awarded the frequencies. But, from whom shall the winning telco recover this auction expense that has nothing to do with rolling out its infrastructure and nothing to do with improving telecommunication services? From the Filipino people, of course,” said DICT Acting Secretary Eliseo Rio.
“In effect, the Filipino people will gain nothing from the auction of frequencies for they will pay for it in the long run, as it will only be passed on to them by the winning bidder to recover the amount it paid.
It will in fact just make of telco services more expensive than when the frequencies were awarded free…Thus, an auction will not benefit the Filipino people, it will only benefit the duopoly,” he added.
An informal survey conducted by DICT showed that that 75 percent of the 15 prospective telco participants preferred the highest committed level of service or HCLoS for the selection of the third telco player.
Under HCLoS, the criteria for the selection of new major telco player are national population coverage (40 percent weightage), minimum average broadband speed (20 percent weightage) and annual capital and operational expenditure (40 percent weightage) computed annually over a five -year period.
Only 17 percent chose the auction mode being pushed by Finance Secretary Carlos Dominguez, which was to auction off the frequencies.
DICT said the participant with the highest amount of bid for five years will be declared as the winner. The minimum amount of bid was pegged at P36.58 billion.
The winning bidder will get these frequencies for free – 700 megahertz (MHz), 850 MHz, 2100 MHz, 2010 MHz, 2.5 GHz (gigahertz), 3.3 GHz, 3.5 GHz and 10.5 GHz to the new player.