NTC | National Telecommunications Commission | Excellence in … · 2018. 10. 12. · Created Date: 10/12/2018 7:37:22 PM
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REPUBLIC OF THE PHILIPPINESNATIONAL TELECOMMUNICATIONS COMMISSIONNTC Building,BIR Road,East Triangic,Diliman,QueZOn city
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CLARIFICATORY/AMENDATORY BULLETIN NO.111 0ctober 2018
NMP SELECTION PROCESS
Issued under Sec.5。 2 of the lnstruction to Participants(ITP)tO Clarify and/or amend certain
provisions of the ITP for the NNIIP Selection Process,considering the questions received by the
Selcction Corrlmittcc ttom the perspectivc Participants.
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ITP Provision Amendatory1. Page 27 of the ITP regarding the
marking of the sealed envelope whichwill contain the two (2) flash drives
“SELECT10N PROCESS FOR NEW MAJOR PLAYER:SECOND晏暉嗜浮SUBMISSION PACKAGE OF
NAⅣIE OF PARTICIPANT
イFLASH DRIVESヽ ''
2. Page 6 of the ITP to add as Annex 10 Amex 10 NMP Undertaking(in favOr of thePCC)
Queries/Issues Clarificationl. Re CF, is coverage of the type of serviceconsidered in determining eligibility?
No. CF requirement is that it should be able tooperate telecommunications serices asauthorized in the franchise and that the scopeshould be nationwide owing to the nationalpopulation coverage requirement as indicated inthe selection criteria.
2. Re CF term, is there a minimum numberof years remaining in its franchise onsubmission date?
No. The CF Holder is not required to have anyminimum number of years remaining in itsfranchise and may thus, have less than five (5)years left on Submission Date.
Thus, should the Participant fall under suchsituation, the NTC will issue a CPCN only for theremaining term of the franchise.
3. Re CF renewal/extension, will NTCassist?
No. NTC will not assist in securing renewal. It isthe NMP's sole responsibility to secure a renewalof its Congressional Franchise.
4.Re P10B paid capital,
a. Is an audited flnancial statemcnts
as of October 2018 considered
``latest audited flnancial
statements''under 4.2(b)ofthe
ITP?
a. Yes. For pu{poses of determiningfinancial capability of a Participant thepaid capital requirement should beindicated in its latest audited financialstatements.
QueriesAssues Clarification
Willthe approval ofthe SEC on
the increase authorized capital
stock and/or paid capital sufflce to
comply with the P10B paid capital
rcquirement?
Please confirm that the SECCertificate authorizing theFranchise Holder to increase itscapital stock is sufficient to complywith the SEC Clearancerequirement in the MC.
Will NTC extend assistance in theParticipant's application forapproval of change in itscontrolling interest?
Noo SEC approval on thc increase of
authorized capital and/or paid capital is
not considered as compliantto the P10B
paid capital rcquirement.
The P10B paid capital requirement should
be indicated in the Participant's[Sec.
4.2(b)ofthe ITP]lateSt audited flnancial
statements。
No.The SEC clearance conternplated in
Sec 10。 1(b)Ofthe MC must state thatthe
te.11ls ofthe Bidding Agreement complies
with the relevant rulcs on the lilnitation of
foreign cquity owllership.Speciflcally,for
the NMP selection process,the SEC will
conduct a review on the above compliance
with fbreign equity owlllership lilnits.
No.Itisthe NMP's sole responsibility to
SCCllre an approval fbr its change in
controlling intercst.
5. Re P10B paid capital, can the paidcapital ofP10 B orthe te...ls Ofthe Bidding
Agreemcnt be implcmented by the N〕 4Pafter issuance ofthe CPCN?
No.Sec.4.2(b)of the ITP on Financial Capacity
provides that the Participant itsclt undCr 4.2(b)(1)
or thc aggregate paid capital ofits rnembers llnder
4。 2(b)(2)should be at least P10B as indicated in
their respective latest audited flnancial statements。
Sec 10.1(b)Of the MC also states that allnong the
docllments requircd ofthe Nヽ4P to subnlit fbr the
proccssing ofits CPCN includes``Compliance by
NNIIP of Paid Capital of at least P10 B and
ilnplementation of the relevant provisions of the
Bidding Agreement,if applicable to a Participant
which has been sclccted as NNIIP.… "
For a Participant under Sec。 4.1(a)Ofthe ITP,the
P10 B paid capital shall be required uponsublnission of the Selection]Document and to be
showll in its latest audited flnancial statements.
For a Participant under Sec.4.1(b)Ofthe ITP,the
member with Congressional Franchisc(CF)doesnot necessarily have P10B ofpaid capital upon the
sublnission of the Selection doculnent but the
aggregate paid capital of allthe lnembers ofthe
consortium shall be at least P10B. Sincc the
CP(〕N is to be granted to the Participant that is a
CF holdcr,said CF holder shall increasc its paid
capital to at least PHP10B ifits paid capital is less
than P10B before the CPCN is Eranted.
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Oueries/Issues Clariflcation6.Rc P10B paid capital,basis ofP10B paid
capital
P40B is thc n■inirnllm cumulative CAPEX/OPEX
on Year l ofthe Colllmitment Period。 (BaSed Onsubnlitted Amual Reports in the last flve ycars of
the dominant telco playcrs)
In evaluating the flnancial capacity ofan applicant,
the NTC adheres to the 70%… 30%debt to equlty
ratio requirement.300/O of P40B is P12B。
In this Nヽ4P Sclcction Process,the NTC decided
to peg it at P10B to makc it casicr for prospcctive
Participants to comply with.
P10B is thc appro対 mate minimum equityrequiremcnt bascd on Year l of the Corllllnitmcnt
Perlod。
7.Re P10B paid capital,can the P10B pand
capital requirement under Section 10 ofthe
NIIC bc complied within 30 days fromcompletion of all conditions prcccdcnt?
No. Sec. 10.1 of the MC provides for 90 calendardays from the issuance of the Confirmation Orderfor the NMP to submit the enumerated documentsincluding "(b) Compliance by NMP of PaidCapital of at least P10B and implementation of therelevant provisions of the Bidding Agreement, ifapplicable to a Participant which has beenselected ss NMP, xxx"
8. Re technical capability, what is "nationalscale"?
How does national scale applydomestic Participant?
the
Sec. 4.2(c) of the ITP states that the Participantshall have experience in the provisioning, deliveryand operations of telecommunication services forthe last 10 years on a national scale.
National scale shall refer to the provisioning,delivery and operations of telecommunicationservices for a country, or particular regions thereofas geographically designated by thetelecommunications authority of that country.
Thus, there are two elements in the abovedefinition: continuous (for the last l0 years) andnational.
The phrase "particular regions thereof, asgeographically designated by thetelecommunications authority of that country"only applies to foreign members of a Participant.
The entity that is a holder of a Congressionalfranchise is necessarily a domestic corporation.
9. Re technical capability, can a foreigninvestor nominate its subsidiary, affiliateor related-company as the entity that willfulfill the Technical Capabilityrequirement?
No. The foreign investor under Section 1.10(b)cannot nominate its subsidiary, affiliate or related-company to fulfill the Technical Capabilityrequirement under 2.3. The subsidiary, affrliate orrelated-company must also be a committedinvestor in the binding Bidding Agreement.
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Oueries/Issues Clarification10. Re technical capability, if a Participant,or a committed investor chose one of thetechnology companies as a partner, such asNokia, Ericsson, Huawei, etc., can thistechnology partner be considered the entitywith experience in the provisioning,delivery and operations oftelecommunications services for the lastten (10) years on a national scale?
No, unless the partner technology company is acommitted investor under Section 1.10(b). TheMC requires the Congressional Franchise holder(Sec. 1.10(a)) or at least one of its committedinvestors under Sec. 1.10(b) to have experience inthe provisioning, delivery and operations oftelecommunications services for the last ten (10)years on a national scale.
Furthermore, please see Sec. 4.2 @) and 8.3 (c) ofthe ITP regarding of the Certification of technicalcapability from the respective officialtelecommunications regulatory agency of any ofthe countries where the Participant's committedinvestors are operating as required in Sec. 4.2 ofthis ITP.
11. Re radio frequency for assignment, isNTC considering the 2.3-3.3 GHz asfrequency for the NMP? Can it be used for5G technology?
Please see Sec. 2.1 of the ITP regarding CoveredRadio Frequencies for assignment to the NMP.
The Philippines has adopted a technology-neutralpolicy with respect to spectrum, giving operatorsthe flexibility to choose what technology to useincludins 5G.
12. Re Participation Security, can aParticipant refuse to extend itsParticipation Security beyond the original180 days from the date of submission andopening of bids?
Yes as provided in Sec. 8.a(cX2) of the ITP. Butin such an event, the Participant is deemed to havewithdrawn its bid and will no longer be consideredshould the provisional NMP be disqualified, orshould the NMP fail to comply with its submissionof documents for the processing of its CPCN.
13. Re Participation Security, if theParticipant is unable to secure allConditions Precedent for the issuance of aCPCN, will its Participation Security beforfeited?
Yes as provided in Sec. 8.a (e) of the ITP.
14. Re Participation Security, can theParticipant immediately withdraw withouttriggering the forfeiture of its ParticipationSecurity in the following cases:(a) Its bid is declared not compliant with
the requirements of the bidding; or
(b) Its bid is declared compliant but theParticipant is not selected as an NMP.
In either case, can the ParticipationSecurity be withdrawn prior to the issuanceof a CPCN in favor of the winninsParticipant?
In (a), the answer is Yes. As per Sec. 8.4 (c)(l) ofthe ITP, upon a finding that a Participant's bid isnot compliant with the requirements of the bid, andupon signing a waiver of its right to file a motionfor reconsideration or is withdrawing any pendingmotion for reconsideration or petitions/appeal, thenon-compliant Participant may withdraw itsParticipation Security.
In (b), the answer is No. The Participant-in-waiting is required to maintain its ParticipationSecurity for the entire period of 180 calendar days.This may be considered as unjustified withdrawalas provided in Sec. 8.a (eX3) of the ITP.
Upon the lapse of such period and the NMP hasnot been issued a CPCN. the Selection Committeewill issue a request to all prospective compliant
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Oueriesflssues ClarificationParticipants to renew its respective ParticipationSecurities.
Refusal by any of the compliant Participants torenew its Participation Security shall be construedas its decision to no longer participate in theproceedings.
15. What is the difference betweenparticipation security and performancebond?
The Participation Security is posted to ensure thata Participant stands by its CLoS for the prescribedperiod and that if successful, the Panicipant (thenamed NMP) will accept its confirmation as theNMP and comply with its CLoS necessary for theprocessing of its CPCN.
The Perfornance Security ensures the faithfulcompliance by the NMP with its obligations underthe Selection Documents and the CPCN during theCommitment Perioc.
16. Re Participation Security, can the700M participation security be dispensedwith as this might be a deterrent toprospective participants?
No. Please see Sec. 8.4 of the ITP.
17. Re Performance Security, is the basisfor the 10% perforrnance bond the totalCAPEX and OPEX of the 5-yearcommitment period or on a year-to-yearbasis?
Noo Please refcr to Sec.11.l ofthc MC.
18. Please confirm if PCC approval isstill required for the BiddingAgreement.
In lieu of PCC approval requirement under Sec.10.1(a) of the MC, PCC has provided anUndertaking that Participant shall execute in favorof the PCC.
19. Please consider converting the 90-day period to submit requirements tothe NTC's issuance of the CPCN as "aperiod necessary to comply with allrequirementstt
The NTC Memorandum Circular No. 09-09-2018was published on 21 September 2018 in thePhilippine Star and took effect on 06 October2018. It is deemed an effective rule and anysubstantive amendments will require anamendatory circular which requires publication,hearing on the draft and publication ofamendments to be effective.
20. Will NTC extend the 90-day periodto comply with Section 10.1 if delay insecuring Congressional approval is dueto causes outside the control of theNMP?
No, except in cases of force majeure.
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Oueriesflssues Clariflcation21. Please confirm that the passage ofSenate Bill 1754 into law will operate toexclude telecommunications networkproviders from the definition of a publicutilitv?
NTC cannot comment on pending bills.
22. Please confirm that the publicownership requirement in R.A. No 7925as appearing as well in legislativefranchises) is not being presentlyenforced by the NTC.
The provisions on public ownership under R.A.No. 7925, as well as its other provisions of the laware in full force and effect.
The herein amendments and clarifications form part ofthe Selection Documents. Correspondingly,all other provisions in the Selection Documents affected by these amendments and clarificationsare similarlv amended or modified.
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