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China Telecom buys bid documents for ‘third player’ selection

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REUTERS

CHINA Telecom Corp. Ltd. became the second foreign company to buy bid documents to become the telecommunications industry’s third entrant — the so-called “third player” — with the selection process also getting a boost after a Manila court denied a petition for a temporary restraining order (TRO) by a participant questioning the bid terms.

State-owned China Telecom, which is listed as an H-share in Hong Kong, is China’s leading wireline telecom provider. Its website claims over 290 million mobile subscribers and over 227 million 4G mobile accounts. It claims over 142 million wireline broadband clients.

On the first day of bid document availability last week, Norway’s Telenor Group became the first foreign firm to participate in the selection process by purchasing bid papers. Foreign participation is thought to be critical to the success of the auction process because major global telcos can provide the expertise and capital to compete as the country’s third major phone company.

Department of Information and Communications Technology (DICT) Acting Secretary Eliseo M. Rio, Jr. said in a mobile message yesterday that the growing foreign contingent of bid document buyers was an endorsement of the third-player seletion process.

”This shows the confidence of telcos in the selection process by NTC/DICT that only Now… is challenging in court,” he said.

He was referring to a TRO being sought by Now Telecom Co. Inc., which was rejected by a Manila court.

In an Oct. 12 order, Regional Trial Court (RTC) Branch 42 said the Now Corp. affiliate’s petition failed to meet the standards for issuing a TRO.

Specifically, Now failed to prove its “unmistakable right” to be protected by a TRO, the “urgent necessity” for such relief, and the “serious damage” that will ensue if the order is not issued.

The company had questioned the size of the performance security — P700 million — required for the winning participant in third-player selection, claiming the terms were changed without being disclosed during public hearings.

The court ruled that the performance security is “contingent” upon Now Telecom being declared the winning bidder.

“There being no right in esse that needs protection by a TRO, by logical extension, no injury, grave or irreparable, exists,” the court ruled.

“Urgent necessity to issue a TRO is likewise wanting,” it ruled, noting that the selection process has a Nov. 7 bid submission deadline, allowing Now to seek other remedies.

Hearings for a preliminary prohibitory injunction are scheduled for Oct. 23 and 24.

The DICT added that a third foreign entity, Mobiltel Holding GmbH, also purchased bid documents on Friday.

It was unclear which telecommunications businesses are operated by Vienna-based Mobiltel, though a search shows it to be a holding company for telecommunications assets and brands in Eastern Europe.

GmbH is a category of company in German-speaking countries equivalent to Limited Liability Company.

Though foreign companies may end up in joint ventures with their local counterparts, parties that have separately purchased bid documents are as follows: Udenna Corp., Norway’s Telenor Group, the consortium formed by TierOne Communications International, Inc. and former Ilocos Sur governor Luis C. Singson’s LCS Group of Companies, and an unidentified Filipino company.

Following the submission of bids on Nov. 7, the DICT hopes to select the third player before the year-end holidays. — Janina C. Lim