Businessman Mel Velarde must put up at least P14 billion before his self-proclaimed 4th telco player NOW Telecom can demand more frequencies from the National Telecommunications Commission (NTC).
Velarde lost his case with the Court of Appeals which upheld the November 2018 decision of the Manila Regional Trial Court Branch 42, which denied Now Telecom’s petition seeking to scrap the implementation of a NTC circular.
The CA said the NTC did not abuse its power when it imposed financial requirements in the selection of the third telco or new major player (NMP) in 2018 (won by Dito Telecommunity after bilyonaryo Dennis Uy was left as the only eligible bidder), specifically a P700 million participation security, P14 billion to P24 billion performance security, and P10 million non-refundable appeal fee.
“Even without DICT (Department of Information and Communications Technology) Memorandum Order 1 Series of 2018, the NTC, by law, had the authority to issue subject circular and impose certain reservations or qualifications with respect to the entry of participants to become NMP and, subsequently, to the grant of a CPCN in the NMP’s favor,” the CA First Division ruled in a decision, penned by Associate Justice Alfredo Ampuan.
The CA rejected Velarde’s claim that the NTC requirements were confiscatory and anti-competitive and should be scrapped.
“The imposition, albeit excessive to the mind of petitioner, was proper as it was issued precisely to ensure that only qualified and capable bidders could participate in the selection of the NMP,” said the CA.
Velarde argued that NOW’s franchise to operate and provide cellular mobile telecommunications services (NMTS), obtained in 1995, entitled it to broader frequencies than what it has so far been given by the NTC .
The CA ruled that Velarde’s sense of entitlement was misplaced. “The grant of a legislative franchise to operate and provide CMTS in favor of the petitioner does not carry with it the right over particular frequencies…At the outset, it bears stressing that nowhere in the petitioner’s legislative franchise does it show that it is entitled to specific frequencies, including the radio frequency spectrum allocated to the selected NMP by virtue of the subject circular,” the CA said.
Velarde has been desperate to insert NOW in the conversation among the top telco players, specifically PLDT-Smart, Globe and Dito. He even went so far as declaring NOW the 4th telco player for which it was penalized by the Philippine Stock Exchange for issuing a press statement without “sufficient basis.”