Coronavirus stalls third telco player commercial launch
This file photo shows a cell tower.

Coronavirus stalls third telco player commercial launch

Ian Nicolas Cigaral (Philstar.com) - February 21, 2020 - 6:51pm

MANILA, Philippines — The Coronavirus Disease-19 (COVID-19) has taken its latest victim, this time in the form of delays for the country’s much-anticipated third telco player whose rollout got stalled by building equipment that cannot be shipped out of China due to the outbreak.

In an interview with DZMM radio, Adel Tamano, chief administrative officer of Dito Telecommunity, said the company, which is 40% owned by China Telecom, is now looking for “alternative sources” of technology and raw materials needed to start their operations after its deliveries from China got stuck.

“We don’t want to use that as an excuse, but being very honest our job is getting a little bit harder because of it (COVID-19),” Tamano said in a mix of English and Filipino.

“We’re finding a solution,” he added.

More than 2,200 people have died and around 75,000 have been infected by the new coronavirus that started in Wuhan, China in December. 

As health experts scramble to develop a vaccine to control the outbreak, countries including the Philippines started putting up travel restrictions to contain the spread of the virus.

Dito’s troubles on raw material shortage mimic that of other contractors dependent on China for raw materials crucial to building infrastructure like telco towers. Philstar.com reported last Wednesday how workers are bracing for a looming steel shortage should the epidemic persist in the next few months.

“The delay in sourcing the equipment for Dito is quite unfortunate. Switch and other equipment should have been sourced and delivered late last year, considering that it was working on a tight deadline,” Grace Mirandilla-Santos, lead convener of the Better Broadband Alliance, told Philstar.com.

“It would help to show partial progress to inspire public confidence that the third telco is really happening,” she added.

Instead of within the year, Dito is not expected to begin commercial operations until March 2021. But as mandated in its license, Dito will have to make its “first call” by May this year. The first call is proof that all components of the network are already in place.

A “technical launch” is due in July so the government can check the company’s capacity to deliver on its promise to cover 37% of the population with 27 mbps minimum average internet speed on its first year.

“I hope the NTC (National Telecommunications Commission) as regulator…, can comment on Dito’s timetable for its commercial launch,” Santos said.

An advantage for duopoly

That said, any delays on Dito’s rollout will surely benefit the existing duopoly, Globe Telecom and PLDT Inc., which President Rodrigo Duterte himself vowed to dismantle. “Any delay is an advantage for Globe and Smart as it allows them to further cement and protect their market share,” Santos said.

Ayala-led Globe and PLDT of Manuel V. Pangilinan have been investing heavily on new technology since Duterte’s threats prompted regulators to hasten the process of selecting a new player back in 2018.

Globe recently announced it is hiking its capital expenditures to P63 billion this year, up 23.5% year-on-year from last year’s record-high of P51 billion, financial statements showed. PLDT, meanwhile, said it is shelling out “bigger” this year than its planned P78.4-billion capex in 2019.

READ: Globe to spend record P63 billion for capex this year | PLDT selling major assets to fund record 2020 capex

As far as Dito is concerned, the company led by Davao-based tycoon Dennis Uy “is aiming to invest P150 billion” this year, said Rodolfo Santiago, the firm’s chief technology officer on a briefing on Thursday. 

“We are going to do this rollout no matter what,” Dito’s Tamano said.

Santos said it is crucial for Dito to be able to show results. “Ideally, all the time, effort, and political capital put into the third telco selection process should be bearing fruit by now,” she said.

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