National Telecommunications Commission - National Capital ...€¦ · Created Date: 10/31/2018...

16
REPUBLIC OF THE PHILIPPINES NAT10NAL TELECOMMUNICAT10NS CO NTC Building,BIR Road,East Trianglc,Dninlan,Qu Emaili″ @″ rC・ .gθ .′ ;wcbsite:力 "・ //― w.″ rc・ .gο ス′カ CLARIFICATORY BULLETIN NO 29 0ctober 2018 NEW MAJOR PLAYER (NMP) SELECTION PROCESS Pursuant to Section 7.2 of NTC Memorandum Circular (MC) NO. 09-09-2018 and Section 5.2 of the Instruction to Participants (ITP), this Clarificatory Bulletin is issued by the NMP Selection Committee (SC) motu proprio, and based on the questions officially received by the SC through the NMP email as of 22 October 2018, to further explain certain provisions of the MC, ITP, and the procedures involved during the NMP Selection Process. Vノ レイ′3z′ ノιルⅣο θ 5 Pttι 15 Queries/Issues Clarifications Re: Audit of Population Coverage using fixed wireless and mobile networks. The fixed wireless access and mobile networks refered to in MC Sec. 13.5(b)(2) refers to terestrial wireless access networks. Any transmission network including Satellite networks can be used to carry traffic to/from the fixed wireless and mobile access networks from/to the natiorral networks. 2. Re: Audit on the Minimum Averase Broadband Speed The term "lowest comparable or equivalent offered service plan" under MC Section I 3.5(c)( I ) refers to the subscription packages offered by existing providers, including the dominant market players: a.) In terms of Price - NMP provides an equal or faster speed for the same price of existing providers; and b.) In terms of Speed - NMP charges an equal or lower price for the same speed offered by existing providers. 3. Re: Latest Audited Financial Statement Is the requirement for the latest AFS refering to a 2018 interim AFS or it is compliant to provide 2017 AFS if that is the latest AFS of the participant and the committed investors? What if the company follows the calendar year for its fiscal year and conducts a financial audit on an annual basis only and therefore cannot provide an interim AFS for 201 8? We note that in the MC, only the AAFS for 2015, 2016 and2017 are required to be submitted. A 2018 interim AFS is only re Participant performed an infllsio the P10-BiHlon paid capital rcquire Ifit foHows the calendar year and c interiin AFS,or ifa colninitted inv itself for thc P10‐ BilHon paid capltal eligi requirement, then the AAFS for 2017 would sufnce. Please also refer to Clariflca Bulletin No.1.

Transcript of National Telecommunications Commission - National Capital ...€¦ · Created Date: 10/31/2018...

  • REPUBLIC OF THE PHILIPPINESNAT10NAL TELECOMMUNICAT10NS COMMISSIONNTC Building,BIR Road,East Trianglc,Dninlan,QueZOn city

    Emaili″た@″ rC・ .gθッ.′力;wcbsite:力 ′"・

    //―w.″ rc・ .gοス′カ

    CLARIFICATORY BULLETIN NO.529 0ctober 2018

    NEW MAJOR PLAYER (NMP) SELECTION PROCESS

    Pursuant to Section 7.2 of NTC Memorandum Circular (MC) NO. 09-09-2018 and Section 5.2 ofthe Instruction to Participants (ITP), this Clarificatory Bulletin is issued by the NMP SelectionCommittee (SC) motu proprio, and based on the questions officially received by the SC throughthe NMP email as of 22 October 2018, to further explain certain provisions of the MC, ITP, andthe procedures involved during the NMP Selection Process.

    ノVノレイ′3z′ノιル Ⅳο θ5Pttι ′グ15

    Queries/Issues ClarificationsRe: Audit of Population Coverage using fixedwireless and mobile networks.

    The fixed wireless access and mobile networksrefered to in MC Sec. 13.5(b)(2) refers to terestrialwireless access networks.

    Any transmission network including Satellitenetworks can be used to carry traffic to/from thefixed wireless and mobile access networks from/tothe natiorral networks.

    2. Re: Audit on the Minimum Averase BroadbandSpeed

    The term "lowest comparable or equivalent offeredservice plan" under MC Section I 3.5(c)( I ) refers tothe subscription packages offered by existingproviders, including the dominant market players:

    a.) In terms of Price - NMP provides an equalor faster speed for the same price of existingproviders; and

    b.) In terms of Speed - NMP charges an equalor lower price for the same speed offered byexisting providers.

    3. Re: Latest Audited Financial Statement

    Is the requirement for the latest AFS refering to a2018 interim AFS or it is compliant to provide2017 AFS if that is the latest AFS of the participantand the committed investors? What if the companyfollows the calendar year for its fiscal year andconducts a financial audit on an annual basis onlyand therefore cannot provide an interim AFS for201 8?

    We note that in the MC, only the AAFS for 2015,2016 and2017 are required to be submitted.

    A 2018 interim AFS is only required if theParticipant performed an infllsion to comply with

    the P10-BiHlon paid capital rcquirelllent.

    Ifit foHows the calendar year and cannot provide an

    interiin AFS,or ifa colninitted investor will present

    itself for thc P10‐ BilHon paid capltal eligibility

    requirement, then the AAFS for 2015, 2016 and

    2017 would sufnce.

    Please also refer to Clariflcatory/Amendatory

    Bulletin No.1.

  • 4. Re: SEC Equivalent Documents

    In some foreign countries, there is no equivalentgovernment agency as the SEC to certifodocuments as true copies, or the equivalentgovernment agency to the SEC does not certifydocuments as true copies. How do we then complywith the requirement to provide certified truecopies? Is it enough that the document iscertified/stamped as true copy and/or a properEnglish translation by the authorized entity, arepresentative of the company, or a local notarypublic.

    Please see Clarificatory Bulletin No. 2, Item No. l4and Clarificatory Bulletin 4, Item No. 18.

    5. Re: GIS and AFS Equivalent Documents

    In the event that such certification cannot beobtained from the country's equivalent corporateregulator, or its Embassy or Consulate in thePhilippines, can such certification to be issued by arepresentative of the company instead?

    Please see Clarificatory Bulletin No. 2, Item No. 14,and Clarificatory Bulletin No. 4, Item No. 19.

    6. Re: Authentication of Foreign Documents

    May we confirm that the documents to besubmitted by the foreign investors as part of theFirst Submission Package are needed to beauthenticated by the Philippine Consular office inthe country of origin only after the NMP has beendeclared and confirmed?

    Yes. Authentication or consularization of foreignexecuted documents will only be required during theprocess for issuance of the CPCN to the NMP.

    Please refer to Clarificatorv Bulletin No. 4. Item No.8.

    7. Re: List of Universal and Commercial Banks

    Can the NTC provide an official list of all theuniversaland commercial banks in the Philippines?

    Please refer to the identified universal andcommercial banks by the Bangko Sentral ngPilipinas in its website:http://www.bsp. gov.ph/banki n g/d irectory.asp

    8. Re: Number of Representatives

    How many people will be allowed to be present perparticipant during the opening of the biddocuments on November 07?

    Due to space limitation, the Selection Committeeencourages Participants to limit their representativesto not more than three (3) individuals during theOpening of Bids on 07 November 2018.

    9. Re: Signature of Authorized Representative

    ls it correct that the Authorizations, OmnibusSworn Statement, and Sworn Undertaking shall besigned by the representative collectively appointedby the participant and its investors in theResolution executed by each of their authorizedrepresentatives?

    It is permitted.

    However, please refer to Clarificatory Bulletin No.4, Item No.l I regarding signatories to PCCUndertaking.

    I 0. Re: Authorized Representatives

    Do the Participant and its comrnitted investors needto submit a Power of Attorney and/or Secretary's

    Yes.

    NMP β“〃ι′ノ″Ⅳο θ5Pαgι 2グf5

  • Certificate for the appointment of their authorizedrepresentatives as part of the bid documents?

    If yes, can a foreign committed investor submit aPower of Attorney (instead of Secretary'sCertificate), and does the Power of Attorney haveto be notarized and authenticated by the PhilippineConsular office in the country of origin?

    Yes, it must be notarized but authentication orconsularization of foreign executed documents willonly be required during the process for issuance ofthe CPCN to the NMP.

    1 l. Re: Omnibus Sworn Statement. Par.l

    Is the Resolution being refered to one that isexecuted by each ofthe authorized representativesof the participant and its committed investors?

    Yes.

    12. Re: Sworn Undertaking

    Is this executed by the sole authorizedrepresentative of the participant and its committedinvestors as designated in the resolution? If yes, dowe need to attach a Secretary's Certificate orResolution showing the authority of the authorizedrepresentatives?

    ls this executed by just one representative of theParticipant and all the committed investors?

    Yes.A Secretary's Certificate or Resolution indicatingthe authority of the authorized representative/s isrequired to be attached.

    Yes, it is allowed subject to authorization by thePrincipals.

    13. Re: Summary Sheet

    Is there a prescribed form for the Summary Sheetdescribed in ITP Sec. 8.3(g)(3)?

    None. Please see Clarificatory Bulletin No. 4, Item31 and Clarificatory Bulletin No. 3, Item No. I (C)(3 ).

    14.Re:Bidding Agreement under MC Sec.1.10(b)

    and ITP Sec.4.l(b)

    Please conflrm our understanding that the

    comnlitinent to increase the authorized capital

    stock required under NIIC Sec.1.10(b)(1)pertains tO

    the commitment to satisfy the P10 Billionminimum paid up requirement in Sec.10.bof MC

    09-09-2018

    Pfease confirm our understanding that "details ofnumber, amount and schedule of payments ofparties to the Bidding Agreemenl " required underMC Sec.l.l0(bx2) pertain to details of how theparties to the Bidding Agreement plan to satisfu thePhpl0 Billion minimum paid up requirement inSec. 10.1(b) of MC 09-09-2018 and that it is notrequired for the Bidding Agreement to contain orprovide the NMP's funding strategy (i.e., whetherfunded by equity or debt) for its Capital andOperational Expenditure within the CommitmentPeriod.

    MC Sec.1.10(b)(1)pe■ ains tO the requttement toincrease its capital to such amounts that wi‖ ensure

    the attainment ofthe CLoS and in accordance with

    its Bidding Agreement.

    Note thatthe P10-Billion is a nnancial qualiflcation

    requirement under the NIIC.

    The ``details of number, amount and schedule of

    payments ofpartiesto the Bidding Agrecment"shall

    necessarily contain such details to ensure the

    attainment ofthe CLoS for the entire Commitment

    Perlod.

    Please see Clarificatorv Bulletin 2. Item No. 4

    /VMP 32:letノ″Ⅳο θ5Pagι 3″rf5

  • 15. Re: Contingent Radio Frequencies

    We request thatNTC categorically undertake in theITP and MC that the entire lOMHz band that willbe released as part of the BayanTelecommunications case shall be allocated to thenew entrant and that no spectrum cap shall beintroduced. However, it would be prudent thatwhen a re-distribution of the lower bands occur,that the distribution in the 2.l00MHz band is alsoperformed. It is clearly unreasonable to withholdspectrum from the new entrant on the basis that thiswill provide him with the marginally larger2.l00MHz holding than the incumbents when thereare no such provisions pertaining to the 900MHzand 1800MHz bands.

    In the event that there is a final and executorydecision or resolution by the Courts in favor of thegovernment, the NTC shall, within a reasonableperiod of time, also assign the relevant radiofrequencies to the NMP.

    The Selection Committee cannot comment aboutfrequencies outside those expressly mentioned inSection 3 of the MC.

    16. Re: Nomination of Subsidiary. Affiliate. orrelated-company

    Please reconsider authorizing a party to theBidding Agreement to nominate its subsidiary,affiliate or related company as the entity which willfulfill the Technical Capability requirement,without requiring such nominated entity to be acommitted investor. This practice has been adoptedin the biddings for the PPP projects of the NationalGovernment or GOCCs since most investorsnormally use holding companies to participate inbids and the establish separate special purposeproject companies to undertake specific projects.These project companies are usually highlyregulated and have contractual and regulatoryrestrictions in investing in other business ventures,which is why it is usually the parent holdingcompany that undertake investment in businessventures whether in the same or in anotherjurisdiction.

    For example, in the BCDA's ongoing bidding tomanage, operate and maintain the existing and thenew passenger terminal for the Clark InternationalAirport, the required O&M Experience may besatisfied by a Consortium Member or its affiliate.

    SC maintains its position as contained inClarificatory/Amendatory Bulletin No. l, Items No.9&10

    17. Re: Technical Capability

    The MC set specific specifications pertaining to theoperational experience of an applicant at minimum10 years on a national scale.

    We suggest that the member fulfilling theTechnical Capability requirement should haveminimum l0 year operational experience onlnternational Scale, rather as now on a NationalScale. That should allow the new entrant todemonstrate ability to successfully undertakeprojects outside to its home country.

    NTC MC No.09-09-201 8 is flnal.

    Ⅳノしイρ βγ〃αノ″Ⅳο.θ D‐

    Pαgι イqrf5

  • 18. Re: Certification of Technical Capability

    Please clarifu that the Certification is required onlyfrom the entity nominated to fulfill the technicalcapability requirement (e.9., a committed investoror its affiliate.)

    Please confirm if it is acceptable to:

    i) Submit a license issued in favor of the entitynominated to fulfill the Technical Capabilityrequirements under the TOR/ITP in the event thatthe said regulatory agency does not issue therequired certification; and

    ii) A certification from an officer or director of thenominated entity that it has the necessaryexperience for the provisioning, delivery andoperations of the telecommunications services forthe last ten (l 0) years; or

    iii) Alternative to items (i) and (ii) above, suchother equivalent documentation that wouldevidence that the nominated entity has at least 10years' experience in the telecommunicationsindustry at a national level in its home country.

    Yes. The Certification isentity nominated to fulfillrequirement.

    required only from thethe technical capability

    Please refer to Clarificatorv Bulletin 4. Item 16.

    Pf ease refer to Clarificatorv Bulletin 4.ltem 16.

    Please refer to Clarificatorv Bulletin 4. Item 16.

    19. Re: National Scale

    Please define what are the minimum constraints fora "particular region" of a country will suffice forpurposes of fulfilling the "national scale"requirement, e.g. we assume that provision ofservice to an area equivalent in size to one of thePhilippines' administrative regions would notsuffice.

    The "particular region" requirement for purposes offulfilling the "National Scale" requirement wouldsolely depend on whether such foreign countrygeographically divided its country in terms oftelecommunications regions and granted suchlicense to that effect.

    Thus, if the foreign country only issues licensesnationwide, then "national scale" would meannationwide operations.

    20. Re: Submission of 2018 Audited FinancialStatements

    Please clarifr that the MC's requirement for thesubmission of the audited financial statements past3 years (i.e. 201 5,2016 and2017) prevails over theinconsistent requirement of the ITP and its Annex6, which require in addition the submission of 2018audited fi nancial statements.

    There isAnnex 6.

    inconsistency between the ITP and

    Please see Clarificatory/Amendatory Bulletin No. l,Item No.4.

    A 2018 interim AFS is only required if theParticipant performed an infusion to comply withthe Fl0-Billion paid capital requirement.

    If it follows the calendar year and cannot provide aninterim AFS, or if a committed investor will presentitself for the Pl0-Billion paid capital eligibilityrequirement, then the AAFS for 2015, 2016 and2017 would suffice.

    ⅣノレイPB“ J/cル Ⅳο.θ5Pagι 5グf5

  • 21. Re: Form of Participation Security

    We suggest including an irrevocable BankGuarantee issued by one of the major national orinternational banks as an acceptable form ofParticipation Security. Such irrevocable BankGuarantee would be a more practical form ofsecurity than initial international remittance ofcash, and in the case ofan unsuccessful candidate,we would propose that the Bank Guarantee isreleased when the successful bidder has beengranted the CPCN.

    Kindly confirm that the in case of a foreign bankwith a universal or commercial banking license inthe Philippines issues the irrevocable letter ofcredit. such letter of credit does not need to beconfirmed nor authenticated by another universalor commercial bank in the Philippines. For furtherclarity, please confirm that any of the universal orcommercial banks, duly licensed by the BangkoSentral ng Pilipinas as appearing in its website -(http ://www.bsp. gov.ph/bankin g/directory. asp)may issue the letter of credit, without need offurther confirmation or authentication.

    No.NTC MC 09‐ 09-201 8 is flnal.

    Yes.

    Please refer to Clarificatorv Bulletin No. 4. Item No.JJ,

    22. Fre: Participation Security

    Please confirm our understanding that any of thecommitted investors or member of the biddingconsortium can procure and post the ParticipationSecurity (i.e. that it is not mandatory for theCongressional Franchise Holder itself to post theParticipation Security in favor of the NTC).

    Yes. Please refer to Clarificatory Bulletin No. 4.Item No. 9.

    23. Re:Congressional Franchise Extension

    lfcongressional approvalis not obtained within 90-

    day requirement post bid as a result ofdelay in the

    approval process,despite successfully lodging an

    application with Congress as soon as the

    declaration of the NMP was made, what is theeffect on the fo‖ owing:

    a.)The requirement to infuse thc P10 billion

    paid in capital into franchisc holder,

    considering that there remains a risk that

    Congress wiH not approve the change in

    control of the franchisc holder until such

    approval has been actua‖ y granted, and

    that the grant of the CPCN therefore the

    commencement of the operations of the

    third telecorn is conditioned on the

    approval ofthe Congress?

    b.)If the cOngress has not yet approved the

    change of control of the Congressional

    Franchisc holder,ho、 v can the consortium

    members infuse the P10 billion capitalinto

    the franchisc holder if the infusion bv

    Please refer to Clarificatorv / Amendatorv BulletinNo. I,Item No. 20.

    However, note that congressional approval shall berequired under circumstances provided in theirrespective congressional franch i se of the participant(e.9. Sale, Lease, Transfer, Usufruct, or Assignmentof Franchise. - The grantee shall not sell, Iease,transfer, grant the usufruct of, nor assign thisfranchise or the rights and privileges acquiredthereunder to any person, -fir., company,corporation or other commercial or legal entity, norshall transfer the controlling interest of the grantee,whether as a whole or in part, and whethersimultaneously or contemporaneously, to onyperson, firm, company, corporation, or entitywithout the prior approval of the Congress of thePhilippines and compliance with the legalrequirements stipulated in other statutes: Provided,That any person or entity to which this franchise isvalidly sold, transferred, or assigned shall besubject to the same conditions, terms, restrictions,and limitations of this Act.).

    ハ`ル

    イρ βγ〃θ″″NO θ5Pttθ 6グ′5

  • committed investors will result in a changein control, therefore it may viewed asviolation of the franchise?

    c.) Can the 90-day period be extended untilthe grant of congressional approval andonly after the congressional approval willparties infuse at least Pl0 billion to complywith the requirements to obtain CPCN?

    If Congress disapproves the change in control ofCongressional Franchise holder or does not act onthe application of the franchise holder for approvalof the change in control, what happens to theparticipation security, considering that thedisapproval or delay cannot attributed to the NMP?

    Hence, it is the NMP's sole responsibility to timelysecure such a congressional approval, if necessary.

    24.Re:P10 Billion Paid Capital Requirement

    Please conflrm our understanding that

    notwithstanding the NTC response that “inevaluating the flnancial capacity of an applicant,

    the NTC adheres to the 70%-30%debt to equltyratio requirement.''The NTC is not requiring the

    Congressional Franchisc Holder to maintain a70:30 debt― to―equity ratio during the Commitment

    Period.This debt― to― equity ratio is not provided in

    the ITP and NIIC and itis our understanding thatthe

    reference to the 70:30 debt― to―equity ratio in the

    NTC response is lnerely for purposes ofexplaining

    the basis for thc P10 Billion minimum paid up

    requirement.

    Yes. we confirm that the reference to the 70:30 debt-to-equity ratio in the NTC response is merely forpurposes of explaining the basis for the Fl0 Billionminimum paid capital requirement.

    25. Re: Extension of 90-day Period throughAmendatory Bulletins

    The NTC stated:

    The NTC Memorandum Circular 09-09-2018 waspublished on 21 September 2018 in the PhilippineStar and took effect on 06 October 2018. It isdeemed an ffictive rule and any substantiveamendments will require an amendatory circularwhich requires publication, hearing on the draftand publication of amendments to be ffictive.

    We request reconsideration of this position sinceSection 7 .2 of the MC itself states that AmendatoryBulletins are effectively only upon posting at theNTC Website.

    Further, we are particularly concerned that the 90-day period is insufficient to secure CongressionalApproval of the sale or transfer of the capital stockvesting controlling equity interests in the CFHolder since the process requires plenary approvalof both the House of Representatives and theSenate.

    Amendatory Bunetins cannot be inconsistent with

    the MC.

    As found in the Omnibus Sworn Statement, aprospective Participant, acknowledges, amongothers, that it has done its due diligence on the laws,rules and regulations, prevailing marketenvironments, regulatory processes and timelines ofthe relevant government agencies relating to thetelecommunications industrv.

    Ⅳプレイρβ“〃αノη Ⅳο.θ5

    Pttι 7グ r5

  • The timing of the NMP Selection Process willlikely coincide as well with the adjournment ofCongress. Moreover, said Congressional Approvalis necessary (especially with the Participation offoreign investors) before the Participant isauthorized under its legislative franclrise toincrease its paid-in capitalto Php l0 Billion.

    26. Re Extension of 90-day Period, CongressionalApproval in Controlling Interest

    The NTC stated:"lt is the NMP's sole responsibility to secure anapproval for its change in controlling interest."

    We request reconsideration of the position of theNTC considering that its expertise andrecommendation to the Congress may facilitateapproval of the transfer of controlling interest.

    In the alternative, please consider incorporatingadditional provisions in the Subject Circular whichauthorize the extension of the 90-day period tocomply with Section 10.1 If the delay in securingthe Congressional approval is due to causes outsidethe controlof the Participant.

    Arnendatory Bu‖ etins cannot be

    the MC.

    inconsistent with

    As found in the Omnibus Sworn Statement. aprospective Participant, acknowledges, amongothers, that it has done its due diligence on the laws,rules and regulations, prevailing marketenvironments, regulatory processes and timelines ofthe relevant government agencies relating to thetelecommunications industry.

    27.Re Forfeiture of Participation Security

    The NTC answered Yes to the query:If the Participant is unable to secure all ConditionsPrecedent for the issuance of a CPCN, itsParticipation Security will be forfeited?

    We request reconsideration on the response to thequery since the inability to secure ConditionsPrecedent may be due to causes outside of itscontrol. Moreover, it is not stated in the MC or tlreITP that the failure to secure Conditions Precedentis considered as "refusal to do anv or all actsnecessary".

    Under Clarificatory/Amendatory Bulletin No. l,Item No. 13, if the inability to secure all conditionsprecedent for the issuance of the CPCN isattributable to the grounds provided in MC Section6.20)$),the Participation Security shall be forfeitedin favor of the NTC.

    However, if the inability to secure all conditionsprecedent is through causes arising without any faultwhatsoever on the parl of the Participant, then thatmay constitute a defense in the forfeitureproceedings on the Participation Security.

    28. Re Amendatory Bid Bulletin stating that theextension of 90 days is only allowed in cases offorce majeure

    Please consider including Material AdverseGovernment Actions (i.e., an act or omission of thegovernment or any of its agencies which preventthe provisional NMP from complying with theconditions precedent for the issuance of theCPCN). We note that the concept of MAGA isusually incorporated in PPP Contracts and the saidground is basis to seek relief or an extension incomplying with an undertaking or obligations.

    The 90-day extension as referred to in ReAmendatory Bid Bulletin relates only to forcemajeure situations.

    As for other situations, kindly refer to the OmnibusSworn Statement wherein a prospective Participant,acknowledges, among others, that it has done its duediligence on the laws, rules and regulations,prevailing market environments, regulatoryprocesses and timelines of the relevant governmentagencies relating to the telecommunicationsindustrv.

    A鶴″ρB“〃ι′ノ″ノVο θ5Pαgο ∂

    `/′5

  • 29. Re: Congressional Approval, Definition ofForce Majeure

    We request reconsideration of this position since itwill be prejudicial for the Participants to unwindtheir capital infusion in the event thatCongressional Approval is not secured for reasonsoutside the control ofthe Participants.

    Please also provide a definition for what constitutes

    force majeure in the context of the NMP selection.

    Force majeure in law refers to natural calamities.

    As found in the Omnibus Sworn Statement, aprospective Participant, acknowledges, amongothers, that it has done its due diligence on the laws,rules and regulations, prevailing marketenvironments, regulatory processes and timelines ofthe relevant government agencies relating to thetelecommunications industrv.

    30. Re: Tie-Breaking Formula

    We propose below an alternative tie-breakformula:

    If two or more applicants' Submissions have thesame number of points, the relevant applicants willbe provided with a further 14 days in order to re-evaluate and re-submit their applications withadditional commitments. The applicant with thehighest points re-submission the number of pointsis still equal, the Selection Committee will selectthe applicant with the highest points in Year 4 asthe provisionalNMP.

    NooNTC MC No.09-09-2018 is inal.

    31. Re: Procedure in case the chosen NMP fails tosecure its CPCN

    Given that the Participations Security is valid untilthe issuance of the CPCN, kindly confirm that ifthe NMP fails to secure the CPCN, then the NTCEn Banc and the Selection Committee will proceedto inform the Participant with the second highestpoints as the new Provisional NMP, which shallthen undergo the Document Verification Phase,and so on as the case mav be. until the NMP is ableto secure the CPCN.

    Yes, the NTC En Banc will direct the SC to performDocument Verification Phase on the next-highestranked/ Participant until a new NMP is duly issueda CPCN.

    32. Re: Reservation Clause

    In light of the significant resources expended by allapplicants for this process, we suggest that anytermination should only be done if there areindicators of improper activities. All applicantswill submit their bids in good faith and where suchsubmissions are valid in accordance with the MCand applicable legislation and where no improperactivities has been found, any reason fortermination must be made transparent and publiclyavailable.

    A Reservation Clause is a standard provision inlocal and international selection/bidding processes.

    MヽP Bガた″″/Va θ5′αgι 9`′ f5

  • 33. Re: Congressional Approval in Change rnControl

    Please confirm whether the CF is still required toundergo congressional approval for a change incontrol will occur at the level of the CF Holder'sparent company.

    NTC cannot comment on issues outside of itsjurisdiction.

    34. Re: PCC Approval

    Please confinn that the PCC exernption will notapply if the change in control will occur at the levelof the CF Holder's parent company.

    NTC cannot comment on issues outside of itsjurisdiction.

    35. Re: Roll Out Plan, NationalTower Policy

    We strongly suggest that Government does notlimit the number of telecoms tower providers. Seerelated comments and discussions in towerlicenses.

    In any case, in the event that Government decidesto award only 2 telecoms tower providers, wewould request that base upon the Roll Out Planagreed with NTC that the telecoms tower providerswill also have obligations to comply with therequirements outlined in the Roll Out Plan of thenew entrant. It will be unreasonable forCovernment to impose penalties on the entrant forfailure of another Licensee to perform.

    The DICT is the primary agency tasked to formulatethe national tower policy.

    The issue is not within the competence or authorityof the Selection Committee to respond to. In anyevent, every Participant has undertaken in itsOmnibus Sworn Statement that it has done its duediligence on the laws, rules and regulations,prevailing market environments, regulatoryprocesses and timelines of the relevant governmentagencies relating to the telecommunicationsindustry

    36. Re: Performance Securitv

    We suggest that an irevocable Bank Guaranteeissued by one of the major national or internationalbanks be accepted. Further, we would assume thatit would be for a total of l0o/o of the remainingcumulative Capital and Operational ExpendituresCommitments. This is important for the newentrant as the two current incumbents do not haveany of these obligations.

    We would further propose that these are put inplace prior to the commencement of eachCommitment year and not for the entire period.Again, the current incumbents do not have thisobligations.

    We propose a change to the last paragraph underthis Section as follows: "The Performance Securityshall be forfeited in favor of the government if theNMP fails to comply with its Commitments in anyyear within the Commitment Period unless the NMPcan demonstrate that the NMP has made allreasonable efforts to fulfil its Population CoverageObligations and its Minimum Average BroadbandSpeed Commitments, but was unable to do so due tocauses beyond its control. This includes failure bylocal authorities to provide relevant aoorovals

    NTC ⅣIC No.09-09-201 8 is flnal.

    /VMP 3z〃 ι′ルⅣο.θ5

    P%″θグ′5

  • within legislative timelines, failure by CentralGovernment to implement critical legislationpertaining to right of way and other infrastructurematters such asfailure of Licensed Tower Providersto perform."

    37. Re: Sanctions for Breach of Commitments

    We propose to amend this section as follow:

    "failure if the NMP to comply with any of itscommitments shall be considered a breach unlesssuch breach was outside its control and where theNMP has made all reasonable efforts to fuffill itsCommitments."

    NTC MC No.09-09-201 8 is flnal.

    38. Re: R.4.7925

    Please confirm our understanding that no penalty iscurrently being enforced for non-compliance withthe dispersal of ownership requirement. We notethat amongst the current congressional franchiseholders, only a few are currently listed on thePhilippine stock exchange.

    The provisions on public ownership under R.A. No.7925,as wellas its other provisions ofthe law are infull force and effect.

    Please refer to Clarificatorv Bulletin No. l. ltemNo.22.

    39. Re: Tower Licenses

    With the significant Performance Guaranteeprinciple only applied to the new entrant, thisobligation appears unreasonable as the new entrantwill be fully dependent on such licensed partiesperform.

    Limiting the number of Licenses to only twoshould also trigger an obligation on the TowerCompany to fulfill the roll out requirements of thenew entrant as a priority and to put in place there levant Performance Guarantees.

    Failure of the Tower Company in fulfilling therequirements of the NTC approved roll out planshould relieve the new entrant from its obligationsunless the new entrant has failed in its ownobligations.

    Recommendation: Include in the MC an expresscommitment from Government that all possibleassistance will be provided in relation to ensuringthat local authorities comply with the ease of DoingBusiness Act, signed into Law May 2018 by thePresident.

    NTC cannot comment on matters outside itsjurisdiction.

    40. Re: Radio Access Network Regulations

    Please confirm our understanding that there is noregulation requiring the CF lrolder to be entitywhich will import, procure, maintain or operate(and secure its own licenses for) Radio AccessNetwork ("RAN") and other telecommunications

    Pursuant to existing laws only the CF holder canoperate radio access network equipment and allpermits and licenses shall be in the name of the CFholder.

    SMP 3″〃θ′ルⅣο.θ5Pttι ″グ′5

  • equipment such as mobile towers or radiotransmitters.

    Further, with the government encouraging theestablishment of Common Tower Companies,please confirm if the Franchise Holder may leasethese assets from such companies or even relatedNon-Telecommunication Company.

    In relation to this, we likewise request for a copy ofthe exposure draft ofthe proposed rules governingthe establishment and use of common towers.

    NTC cannot comment on matters outside itsjurisdiction.

    41. Re Implementation of Free Trade Agreements

    Please confirm that the requirements under theEFTA-PH FTA will be actively enforced by theNTC at all times. In particular, we requestconfirmation that NTC will strictly enforcemandatory interconnection at non-discriminatoryterms, conditions, and rates, and for this purpose theGovernment commits to issue the necessaryresulations for its enforcement.

    The issue is not within the competence or authorityof the Selection Committee to respond to.

    42. Re: NGCP Dark Fiber

    Please provide relevant information andGovernment commitments regarding this in orderfor applicants to adequately plan and cost thenetwork. The anticipated costs for dark fiber accessin the NGCP should be disclosed as earlv aspossible during the process.

    Obligations of the curent dominant incumbentoperators to publish a Reference Access Offershould be enforced and prices, terms andconditions of such should be approved by bothNTC and the Philippine Competition Commissionin order to ensure that prices are not discriminatoryor set high in order to prevent access.

    Please provide a rough estimation of costs to obtainaccess to the Government Landing Stations and thecapacity offered through the Facebook agreementsas this will be of critical importance for the deliveryof high speed broadband services throughout thePhilippine islands.

    NTC cannot commentiurisdiction.

    matters outside its

    43. Re: Spectrum and Remedies

    Spectrum and Remedies: Efficient spectrumdistribution and management will be of criticalimportance for Philippines in order to obtaincompetition in the mobile sector benefitting theoverall economy and society at large. Relativelyequal distribution of low-frequency spectrum is themost critical factor to ensure competition betweenthe MNOs in the Philippines

    The absence of 2G spectrum and low-band 39spectrum can be mitigated with the followine 2

    The Selection Committee cannot comment onmatters outside the purview of the MC and the ITP.

    /VMP 3“Jrarレ Ⅳo θ5Pagθ r2りC15

  • remedies, which we suggest Governmentincorporate its commitments in relation theretothe TOR:

    l. mandate national roaming on the otheroperators' networks with sustainable terms ofaccess, which would enable subscribers in the newentrants network to roam onto a host network if thehome network is not present in a particular location(for 2G, this location would include the whole ofPhilippines).

    2. a spectrum roadmap with a clear path toimproving the spectrum portfolio of the newentrant; Spectrum must be distributed in such a waythat there exist viable spectrum packages that cansupport the effective operation of three autonomouswireless networks.

     

    As found in the Omnibus Sworn Statement, aprospective Participant, acknowledges, amongothers, that it has done its due diligence on the laws,rules and regulations, prevailing marketenvironments, regulatory processes and timelines ofthe relevant government agencies relating to thetelecommun ications industry.

    44. Re: Spectrum Usage Fees (SUF)

    With the SUF being revised, we suggest that thisshould be concluded prior to the Bid date in orderfor the applicants to factor this into the valuationand business plan.

    We also suggest that a reasonable imposition ofspectrum caps be introduced, with spectrumholdings in excess of such caps being subject to"windfalltax"

    The Selection Committee cannot comment onmatters outside the purview of the MC and the ITP.

    | 45. Re: Competitiveness Remedies

    With both Smart and Globe designated Dominantentities, such dominance also comes withobligation not to abuse their position.

    We suggest that the current process, deliberationsand decisions pertaining to the National Roamingobligations be reviewed by PCC.

    We also suggest that with the Mobile VoiceTermination price now set at PHP 0.50, this levelshould be used as reference point for the provisionof National Roaming Voice Services. ln relation toAccess to Nationwide Data Roaming Services, theimportant principle of Wholesale Margin Squeezemust be adhered to and remedies put in place toavoid such abuse of dorninant position. One way ofhandling Data Roaming provisions are through theprinciple of Retail Minus obligations. This shouldensure that the new entrant have access and margineven if the dominant operators drop the retailprices. Again, this is within the remit of both NTCand PCC.

    We also suggest that the Nationwide NationalRoaming covering 2G/3Gl4G services be imposedas an obligation on both the dominant operatorsprior to Bid submission date in order for theparticipants to have firm visibilitv of their rishts and

    The Selection Committee cannot comment onmatters outside the purview of the MC and the ITP.

    ノVルイP3γ JJa′ノ″NO θ5P"θ ′Jグ′5

  • associated costs. This would be a natural element ofa Reference Access offer where such RAO containsterms and conditions for supply, costs, timelines forsupply, technical standards and dispute provisions.All of these should comply with the stipulationscontained in the Philippine Competition Act.

    46. Re: RA 7925 requiring a full-servicetelecommunications entity with a license formobile also to provide landlines

    We suggest that the MC expressly clarifo eithermandating compliance with the Republic Act orrelievins the new entrant of this oblieation.

    The Selection Committee cannot comment onmatters outside the purview of the MC and the ITP.

    47. Re:National Broadband Plan

    The Bid package issued by the NTC contained acopy of the National Broadband Plan which, indetail, outlines the supporting regulatory policiesrequired to ensure a competitive telecom sector andresulting reasonable prices and high qualityservices.

    Can the applicant assume in its business plan thatcritical foundation regulations, as outlined in theNational Broadband Plan, will be implementedprior to issuance of CPCN?

    The most critical regulations are:- National Domestic Roaming,- Open Access Regulations- Share Tower Regulations

    Please see Clarificatorv Bulletin No. 2. ltem No. 5

    48. Re: The final Terms of Reference has noIongstop date/limit for launch of operations.

    Can NTC confirm that it will be the NMP'sprerogative as to when it will launch commercialservices and officially commence its Year Icommitments?

    It is the NMP's prerogative as to when it will launchits commercial services. The NMP's Year 1commitments officially commences on the issuancedate of its CPCN. The Independent Auditor shallconduct test and measurements starting on theannual anniversary date ofthe issuance ofthe CPCNunder Section 13.5(a) of the MC.

    49. Re: Amendments to the Public Service Actlifting nationality restrictions ontelecommunications remain pending, making itdifficult for foreign parties to finalize theirparticipation.

    We request the NTC to reconsider deferment of thebid submission date until the PSA amendments havebeen passed.

    The NTC cannot comment on pending bills.

    A/MP β“/Jarル 7Va.θ5

    Pagι rィ 9rfj

  • 50. Re Conversion Rates

    Section 1.6 (b) of the ITP provides:b. "For purposes of determining the FinancialCapability of any Participant under Secs. 4.2(b)and 8.3(9)(2) and (3) of the ITP, all amountsexpressed in foreign currencies shall beconverted to their Philippine peso equivalentbased on the prevailing exchange rutes as of 22October 201 8, officially published by the BangkoSentral ng Pilipinas (BSP) atwww.bsp. gov.ph/statistics/sdds/ exchrates.htm.

    The Selection Committee hereby provides, asAnnex I of this bulletin, the foreign curuencyconversion rate to Philippine Peso, applicablefor22October 2018, as officially published by the BangkoSentral ng Pilipinas (BSP) at www.bsp.gov.ph/statistics/sdds/ exchrates.htm.

    Participants whose paid-capital and auditedfinancial statements are expressed in foreigncurrency shall use the applicable foreign currency toPhilippine Peso conversion rate in the SummarySheet required to be submitted for the paid capital ofthe parties to the binding bidding agreement, basedon their latest audited financial statements.

    5l. Re: Selection Documents Cabinet Inspection Participants are reminded to pack their SelectionDocuments according to the inner dimensions ofSelection Document Cabinet as discussed inClarificatory Bulletin No. 3, Item IL B.

    Participants may inspect one of the SelectionDocument Cabinets from 0l to 04 November 2018,8:00 a.m. to 5:00 p.m. PST, at the Ground FloorLobby of the NTC Main Office Building.

    52. Re: Lockable Cases, Bags or Containers Participants are reminded to comply withClarificatory Bulletin No. 3, Item No. II. C.regarding submission of Selection Documents usinglockable cases, bags, or containers.

    The herein clarifications shall form part of the Selection Documents. Correspondingly, all otherprovisions in the Selection Documents affected by these clarifications are similarly amended ormodified.

    ⅣЪιイP3"〃α″ Ⅳο.θ5Paga r5`/15

  • frnnex n !'

    BANGKO SENTRAL NC PiLiPiNASF:NANCIAL MARKET OPERAT:ONS SU8‐ SECTOR

    REFERENCE EXCHANGE RATE BULLET:N

    COu‖TRY

    ∴COWER"CuR… wr"韓 0鍛"υ

    L:

    UNIT SYMBOL EUROEQuVALENr

    am2ooO.007711

    1.130mQl10725Q871003

    …■030305

    0.61誡23020

    NrA

    a231411

    ■0225Q000007Q“詢6“

    Q23ml.000000

    aOmG7Q123300

    0023707Q238703013403Q011334■20m040046086Q573711

    ■103073

    a000007000026am66maoola陽C028911

    PI●L"EQuVALHr

    颯 ¨

    04786

    …田 12

    …41.“ユ 1271

    3-142●14

    NrA

    l“ユ

    “Qα

    lJttE22

    14い口旧田H5

    020007側

    “"7議"

    lUNn■D STATES2JAPAN30Ⅲ田日)KINGDOM4HOCONG6SnmttEttLANDeCANADA7SINeAPORE3AtlSTRALIAOBA‖ RA:‖

    10KUWAITll SAUDI ARABIA

    12 BRUN日

    13:‖DONESIA14蘭 LAND16 UNrTED ARAB EMIRATES10EUROPEAN MONttARY umON17 KOREA10CmtA

    鳳 0フH翼 ,“ FCOryFR78LE"爾 3Se

    19ARGEN nNA

    "日Rttat

    21 DENMARK22:NDIA

    23MALAWA24 MEXICO

    26 NEW ZEALAND

    "NOmAY27PAK3STAN

    "SOuTH AFaCA20SWEDEN303VRIA31TAWAN

    00LLARYENPOUND00LLARFRANCDOLLAR00LLARDOLLAROIMR・mRRllrAL

    …RUplAHBAHPDIRHAMEUROWONVLIA「

    PE30REALKRONERRUPEERINeCTNttW PESO

    …KRONERR3RERANDKRONERPOWDNr DOLLAR

    EQtWALE‖ T

    llHⅨ自D00

    011“臼DB2

    1」307枷0.127333

    lm6QπB“曖

    0.腑 0●■1400

    2“目F2MA

    Q-907233800…0.…0-21。101000

    0…al“

    U8DJPYOBPHKDCHFCADSCDAUDBHD鮒 DSARBND:DR

    THBAEDEURKRWCNV

    ARSBRLDKK:NR

    rrR

    …脚

    NOKPIQZARSEKSYPTWD

    Q0273750.30201

    Ql“H膊a“枷0.240016

    0■61囲0■関田旧Ю0●121714

    am7ma000800■111261

    amtwaOS2370

    1474Ю

    143007鰤 70

    Q蟄口躊

    120m27070

    “a日開け

    04Ha“ϊ

    a“1凛

    BSP B●蜘 Rab lT● :PHPBSP S● lllng R3● lT●: PHPBSP RemncoF“ 由|: PHPPOS CI●●I●ORm (19・ oct.m13):PHPSDR R●●: 3

    TH3 0ooho「o…REUTERStFOu CLOSING PHCES ao orNlrl■ ロト130ct・2038