NTC sets P100-M asset threshold for Konektadong Pinoy entrants

THE National Telecommunications Commission (NTC) said data transmission industry participants (DTIPs) must have assets of at least P100 million to operate core network services under the Konektadong Pinoy law.

In a memorandum circular dated Feb. 2, the NTC also outlined registration requirements for prospective entrants, adding that it will serve as the entity receiving their registrations.

The NTC also said that eligible applicants must have a technical and financial capability to deliver reliable and secure services and must also establish, operate and maintain data transmission infrastructure.

It said that participants that meet all the requirements may apply in one or more segments of the data transmission network.

“In determining financial eligibility, the NTC shall evaluate the financial and economic viability of the applicant’s proposal to operate as a DTIP in its proposed data transmission segment, accounting for the scale and complexity of its proposed operations,” NTC said in its memorandum circular.

The Department of Information and Communications Technology (DICT) has said that one Philippine company is seeking to enter the industry under the provisions of the Konektadong Pinoy Act.

All applicants, except for middle mile providers, will be required to pay a performance bond, the NTC said, noting that the bond will be equivalent to at least 10% of the applicant’s projected capital expenditure for the first two years, but not to exceed P5 million.

The memorandum requires all applicants seeking to operate in any segment of the data transmission network whether as international gateway facility, core or backbone, middle mile, or last mile provider to allocate minimum assets for each application and to maintain a debt-to-asset ratio within a prescribed threshold.

“The NTC shall periodically review the minimum asset requirements, leverage ratios and related financial thresholds every three years or at such shorter intervals as may be necessary, after taking into account inflation, industry environment and other relevant economic indicators,” it said.

The NTC said that the debt-to-asset ratio for all applicants for all segments is at 70%. The memorandum outlined that the minimum asset requirement for international gateway facility applicants is P1 billion; around P100 million for core or backbone network applicants, P10 million for middle-mile provider applicants, and P500,000 for last-mile providers.

The Konektadong Pinoy Act, also known as the Open Access in Data Transmission Act, lapsed into law in August.

The law streamlines the licensing process for new entrants, boosting competition in data transmission.

About seven foreign companies have signified interest to enter the Philippine telecommunications sector, with each company expected to invest around $1 billion.

Globe Telecom, Inc. President and Chief Executive Officer Carl Raymond R. Cruz said that the company will work closely with the DICT to ensure that DTIPs are subject to strict cybersecurity vetting and certification. 

“We need rules that balance openness with accountability, especially around infra use, security standards, and spectrum coordination,” Mr. Cruz said. — Ashley Erika O. Jose