MANILA, Philippines - Three mobile phone companies have scored the National Telecommunications Commission (NTC) for excluding them from participating in the auction for the last and fifth 3G license.

Another telecom firm, however, said the NTC, the telecom industry regulator, should not grant the 3G license, as to do so would be in violation of the election law.

Multi-Media Telephony Inc. (MTI) said the NTC could be violating rules on election ban set by the Commission on Elections (Comelec).

“Under the rules, the NTC is prohibited from awarding frequencies or granting new applications during election ban,” said Lorenzo Tañada.

To verify if there should be a status quo on all pending applications of telcos and broadcasting firms, the NTC is poised to seek an opinion from the Comelec, said deputy commissioner Douglas Mallillin.

Sources said the exclusion of Globe Telecom, Smart Communications and Digitel Mobile Philippines Inc. is intended to favor only one player. They identified the favored player as San Miguel Corp. (SMC), which is going into a telecom venture through Liberty Telecoms.

Industry sources described the remaining 3G slot as so precious that all carriers are keeping an eye on it, particularly on how the NTC intends to dispose of it and which lucky phone firm will eventually get the permit to operate it.

On Thursday’s public hearing focused on the draft memorandum circular (MC) on rules on the assignment of the remaining 3G radio frequency band 1965–1975 megahertz (MHz)/2155–2165MHz or 1890 1900MHz/1970 1980MHz. There, Globe Telecom, a 3G firm, said the proposed rules were apparently meant to favor only one carrier.

“This draft MC is a continuation of the 2005 MC. In this case, there could only be one more company left that can be awarded with a 3G frequency. And we all know which company it is,” said Froilan Castelo, Globe regulatory affairs head.

Sources said “obviously, it is meant to favor San Miguel.”

SMC has interests in Liberty Telecoms Holdings Inc. and Bell Telecommunications Philippines Inc. Bell is a holder of a CMTS (cellular mobile telephone systems) permit.

Representatives of Liberty and BellTel were present during the hearing. However, they refused to comment on the issue, saying they attended only as “observers.”

“It’s so very obvious. Existing 3G firms are disqualified from applying for the remaining 3G frequency. So who gets the last slot? The only phone firm with a CMTS permit that has not participated before is BellTel,” said a source.

The NTC recently approved the transfer of ownership of BellTel to Two Cassandra-CCI Conglomerates Inc., a holding company that once owned a small stake in Liberty, which was bought by SMC together with partner Qatar Telecoms Inc.

Another source said that aside from SMC there are talks that the last 3G slot may go to Schutzengel Telecom Inc., a new entrant which allegedly has close ties with the religious sect Inglesia ni Cristo.

Schutzengel Telecom Inc. filed last month an application with the NTC for a provisional authority (PA) to construct, install, operate and maintain a nationwide 3G mobile telecommunications system. This company had obtained its congressional franchise only last year.

Globe, Smart and Digitel Mobile questioned the draft MC, which prohibits existing 3G operators and their affiliates from applying for the available 3G slot but allows new applicants and those that the NTC previously disqualified,

“Grantees/Awardees of 3G frequencies and their affiliates shall not be qualified to apply for the assignment of the frequency band specified,” the draft MC stated.

This means that Smart, Globe, DMPI, and Connectivity Unlimited Resources Enterprises (CURE) are already disqualified.

Globe, Smart and DMPI said they will submit a position paper against the circular.

Globe and DMPI each has 10Mhz of 3G frequency. Smart has a total of 25Mhz since it also owns CURE , which had been awarded with 10Mhz.

The draft MC also states that losing 3G firms and new entrants-even those that are not yet authorized to offer cellular service-can apply and possibly be awarded with the 3G permit.