HUGE RISK   Mislatel to lose P24-B bond for performance failure

Mislatel  (Mindanao Islamic Telecommunications) Consortium will lose P24 billion in performance bond once it fails to fullfil its commitments as the third telecommunication’s provider.

This was the statement of Acting Secretary Eliseo Rio Jr. of the Department of Information and Communications Technology (DICT), who said the bond is imposed since Mislatel is the lone qualified bidder in the selection process.

Aside from losing the huge performance bond, Mislatel would have to return the allocated frequency by the National Telecommunications Commission (NTC), the quayside judicial panelist of the bidding on the third telco.

“Mislatel cannot sell their frequency to other telcos,” Rio also said on Thursday during the National TECH4ED Awards press conference at the Royal Mandaya Hotel in Davao City.

Unlike PLDT-Smart Communications and Globe Telecom, Mislatel is the first telco in history to have a performance bond, as part of the term of reference, the DICT acting secretary said.

Mislatel is a consortium between Davao-based businessman Dennis Uy (Udenna Corp.) and China Telecommunications Corp.

Among the third telco’s commitments  are: to invest P257 billion in five years; to provide internet speeds of 27 megabits per second in its first year of operations and 55 Mbps in its fifth year; and to cover 34 percent of the country’s population in its first year of operations and 84 percent in its fifth year, Rio said.

The timeline for the operation of Mislatel is still indefinite since the Congress has to pass a resolution in awarding them a franchising operation.

“They cannot fully operate yet because the NTC has not yet allocated them the frequency they need for operation, which would still depend upon the approval of  Congress,” Rio said.

The DICT head also said that the motion for reconsiderations (MRs) filed by disqualified bidders  Sear Telecommunications Consortium, formed by TierOne Communications International Inc. and LCS Group of Companies (Sear-LCS-TierOne); and Philippine Telegraph and Telephone Corp. (PT&T) could derail the start of the selected third telco’s operation.

The MRs have been set aside by the NTC, however, as of the writing, the disqualified parties can still file their legal appeals up to the Supreme Court.

Rio encouraged the disqualified bidders to muster all their arguments and pieces of evidence and seek court relief if they want to.

He, however, said that Sear, PT&T and even smaller telco players will benefit from the operation of a third telco since it will have to farm out contracts to fulfill its commitments.

“The third player will need your services and participation if it wants to succeed.” Rio said.