DITO is here to stay

Even before the supposed third telecommunication company or telco for short could go online, a self-proclaimed fourth telco announced last week its entry into the country’s telco industry. In fact, the designated third telco player in the country – the DITO Telecommunity Company Inc.or DITO for brevity sake – is still awaiting approval of its own 25-year franchise renewal now pending at the Senate.

The House of Representatives already approved on third and final reading House Bill No. 7332 last Aug.17 which will renew the franchise of the DITO to “construct, establish, install, maintain, and operate wire and/or wireless telecommunications system in the Philippines.”

Although its original franchise is still valid up to April 24, 2023 yet, DITO deemed it prudent to apply for its extension at this early. Adel Tamano, chief administrative officer of DITO told this to us in our virtual conversations at the Zoom Webinar Kapihan sa Manila Bay last Wednesday.

Tamano assuaged the DITO customers as well as their foreign and local investors of un-interrupted service and business operations. These commitments, Tamano cited, are best manifested through the DITO’s P25-billion performance bond paid to the national government; the P150 billion worth of investments being poured for this year alone; and a total of P257 billion more over their first five years of operations.

Tamano vows the DITO will live up to its true Filipino name which translated in English means “here,” as in right here, right now expression. This is to address issues and concerns being raised lately against the third telco.

Designated as the third major telco player, DITO’s entry is billed to break the “duopoly” in our country’s telco industry. Of course, this refers to Globe Telecom and PLDT-Smart Telecom.

In truth, there are other telco players in the country that includes Converge and P, T & T but have very small of on market share. Definitely, the two telco giants have the biggest market shares given their vast networks, capital, and infrastructures. So breaking the “duopoly” is a way bit melodramatic to sell DITO’s entry will improve internet service and connectivity all over the Philippines.

So how would DITO be able to break the duopoly? Tamano replied: “We want to disrupt it (telco industry), not to destroy, meaning what we want to offer for sure is more affordable and simpler packages for consumers as the way to compete.”

Likewise, Tamano directly addressed persistent accusations against DITO as might “spy” for China, given its more advanced information and communication technology. This is the apparent offshoot of DITO’s memorandum of agreement with the Armed Forces of the Philippines (AFP) to be allowed also to put up their telco towers inside military camps. Both Globe and Smart have telco towers in several AFP military camps in Metro Manila and elsewhere in the country.

In yesterday’s virtual public hearing of the Senate, Globe general counsel testified 80 percent of its equipment come from Huawei Telecom, the biggest telco of China that has the most advanced 5G technology. Following US suspicions of alleged “spying,” Globe claims it has began replacing Huawei-supplied devices.

The China card against DITO is its partnership with state-run China Telecom that has 40 percent stake in this Philippine registered telco. But DITO is majority owned by Davao-based Chinoy businessman Dennis A. Uy. Uy’s Udenna Corp. controls 60 percent of DITO. Tamano noted DITO has only two foreigners in its top executives among its over 1,000 all-Filipino personnel.

Uy is more known as one of the major political campaign supporters of former Davao City Mayor Rodrigo Duterte during the May, 2016 presidential elections.

Aside from being tagged as presidential “crony,” Uy’s partnership with China Telecom have become magnets trying to pull down this third telco from getting off the ground.

While DITO has been busy complying with its franchise commitments, the National Telecommunications Commission (NTC) reportedly issued to NOW Telecom Company, Inc. as the country’s “fourth telecommunications industry player.” The NTC issued its provisional authority (PA) to NOW Telecom last Sept. 14, two years after they got their franchise extension for another 25 years.

So, there would be now four cellular mobile telephone service licensees in the country: Smart, Globe, DITO, and NOW Telecom.

The NOW Telecom got its franchise extension on February 22, 2018 when President Rodrigo Duterte signed Republic Act (RA)10972  granting it “to engage in the business of providing telecommunications including electronic communications and electronic communications services throughout the Philippines and between the Philippines and other countries and other territories, including outer space.”

It was also way back in 2018 when the DITO secured the passage of a Joint Congressional Concurrent Resolution that authorized them to acquire the original franchise from the Mindanao Islamic Telephone Company Inc.’s (Mislatel).

Under its original franchise, the DITO is obliged by the NTC to set up telco coverage to at least 37 percent of the population, with an average minimum internet speed of 27 megabits per second (Mbps). So far, DITO has put up 859 out of 1,300 cell towers it committed to the NTC by July 8, 2020. Failure to meet franchise requirements, the DITO will lose its P25 billion performance bond forfeited in favor of the government.

However, the outbreak of the coronavirus disease 2019 (COVID-19) pandemic led to lockdowns that affected the entire Philippines, including the “start-up” schedule of the DITO.

Insisting the DITO never gets any “special privileges,” Tamano, however, was very thankful to the interventions of the NTC and the Department of Information and Communications (DICT). The DITO was among those exempted from the lockdown restrictions to meet their commitments to the government.

Their new roll out is reset to March, 2021. But even with the COVID-19 pandemic – pardon the crude pun – DITO is here” to stay in the Philippines.