Transco gets venture offers in telco pursuit

By Lenie Lectura - October 8, 2017

https://businessmirror.com.ph/transco-gets-venture-offers-in-telco-pursuit/

THE National Transmission Corp. (Transco) said it has received strong interest from 10 firms willing to forge a partnership to pursue a venture into telecommunications.

“They are offering to partner with us. They are local and foreign firms, mostly foreign from Japan, China, Indonesia and the US,” Transco President Melvin Matibag said, adding the government intends to retain a majority stake in the possible partnership. “Right now, what I am thinking is we will not be a minority in this. We may just give the O&M [operations and maintenance] to them.”

Matibag declined to identify these companies albeit he said those from Japan and Indonesia are “the third-largest telco” and “engaged in [the] cable [services]”, respectively. He said “there are many Chinese telcos, too.”

The owner of the country’s transmission assets said last week it will ask Congress to amend Transco’s charter so it could offer telecommunications services, competing with major rivals PLDT Inc. and Globe Telecom Inc. Since then, Matibag said “many called, sent letters, text and e-mail”.

Matibag also said local carrier Philippine Telephone and Telegraph Inc. (PT&T) wrote Transco, signifying its interest to enter into a lease agreement with the state firm. Transco’s cable wires can be used to offer a wide range of broadband services, he added.

“PT&T wrote us a letter. But the letter of PT&T is to lease. However, our plan now is not to lease. What we want to develop is telco. Anyone can come into the framework that we are crafting because what we intend is to get the congressional franchise in order to operate a full telco business,” Matibag said, adding he will request these 10 companies to submit their respective project concept.

Matibag said he would formally submit his proposal to Congress within the month, probably on the third week. He is confident that the majority of lawmakers will sponsor a bill on this. “Many have volunteered to sponsor it. I am hoping that after the recess, this matter would be taken up,” Matibag said. “I will also write to the secretary because this maybe certified as urgent.”

Matibag added he is doing this mainly because he wants to provide consumers a choice. There are currently only two players in the telco sector.

“Some experts in telco are saying that only the government can compete with the two telco giants. No one else can come in,” Matibag said. “So, if it’s the government combined with a somebody that has the technical and financial capabilities to do it, then here comes a third player.”

Transco was created under Republic Act (RA) 9136, otherwise known as the Electric Power Industry Reform Act of 2001.

Since March 1, 2003, Transco operated and managed the power-transmission system that links power plants to the electric distribution utilities nationwide. The same law mandated the privatization of Transco through an outright sale or management concession agreement.

Following a public bidding conducted in December 2007, the Transco concession was awarded to the National Grid Corp. of the Philippines (NGCP), which eventually secured a congressional franchise to operate the transmission network through RA 9511.

Transco turned over the management and operation of its nationwide transmission system to the NGCP in January 2009.  Ownership of all transmission assets, however, remains with Transco.