China-backed Dito Telecommunity launches Philippine mobile service to challenge duopoly

11, Mar. 2021

A screen shot of Dito Telecommunity Corp.’s CEO and chairman Dennis Uy who spoke during the online media briefing on the launch of its mobile service on March 8, 2021.
A screen shot of Dito Telecommunity Corp.’s CEO and chairman Dennis Uy who spoke during the online media briefing on the launch of its mobile service on March 8, 2021.

By Darlene Basingan

MANILA, NNA – New telecommunications player Dito Telecommunity Corp. has begun taking on two telco giants in the Philippines after launching its mobile service in the central and southern regions with free welcome perks.

The initial rollout on Monday (March 8) covers 15 areas in urban centers of Cebu in Visayas and Davao in Mindanao – places considered as “underserved” or have slow internet speed.

To entice subscribers to its network, Dito is offering unlimited data, calls and text messaging for free for 30 days.

It will then extend service to capital Metro Manila “in a few weeks” and the rest of the country by the middle of the year.

Dito's SIM card is priced at 40 pesos ($0.82), almost the same as that of the other two telcos, which had reportedly adjusted pricing ahead of the impending competition.

However, Dito's SIM cards can only work on 4G and 5G phones. Many people in these areas are still using 2G and 3G phones, which have fewer functions and slower speeds.

Filipino businessman Dennis Uy’s Udenna Corp. owns 37 percent of Dito while his Chelsea Logistics and Infrastructure Holdings Corp. holds a 24 percent stake. China's state-run China Telecoms Corp. owns the remaining 40 percent, the limit for foreign investors in the sector.

While Dito has not disclosed any business targets, it said it can cater to any increase in demand for its SIM cards, which are also sold online. It has also not given details of the launch of its post-paid and fixed-line broadband services.

The company has opened physical stores which will number up to 20 for the launch. More will come up in the coming months.

Dito is giving away 3,000 SIM cards to COVID-19 front-liners such as nurses, doctors, teachers policemen battling the pandemic in the country.

Its chief technology officer, Rodolfo Santiago, said it is offering mobile internet speed of at least 27 megabits per second (Mbps), which should cover around 37 percent of the country’s population in the first year of operation.

Last month, the National Telecommunications Commission said Dito's entry would pave the path for healthier competition, cheaper prices and better internet speed.

For many years, the telco market has been dominated by two big players PLDT Co. and Globe Telecom Inc. They were caught in the crosshairs in recent years when Philippine president Rodrigo Duterte kept threatening to shut them down if they failed to improve internet services.

Japan’s NTT Group holds a 20.35 percent stake in PLDT which is led by tycoon Manuel Pangilinan. Singapore Telecommunications has a 20 percent stake in Globe, whose majority shareholder is backed by conglomerate Ayala Corp.

Duterte has been instrumental in enabling the entry of the third telco player in the Philippines.

In 2017, he ordered the government to fast-track the application of China Telecom despite security concerns aired by some quarters. The latter rode on Mindanao Islamic Telephone Company Inc., a dormant company, to snag the license for telecom services, including fixed broadband.

With the arrival of Dito, the three telcos are expected to compete intensely in the 5G arena.

Despite being a new-comer, Dito has expressed confidence, saying it could bank on the reliable 5G technology and experience of China Telecom.

“Once we get to that point where the fight goes to 5G, we are going to have an edge on that,” said Adel Tamano, Dito's chief administrative officer.

Brushing the threat aside, an official of PLDT said last week that the third telco would probably “take a long time to catch up” if it tries to challenge the dominance of PLDT.

Meanwhile, Globe has roped in Nokia to upgrade its 4G network to 5G and expand next-generation technology to more than 1,000 areas across the Philippines.