With more funds, China-backed Dito telco to begin Philippine service in 2021

21, Feb. 2020

Adel Tamano, chief administrative officer of Dito Telecommunity Corp., at a press conference in Taguig City near Manila on Jan. 20, 2020. (NNA)
Adel Tamano, chief administrative officer of Dito Telecommunity Corp., at a press conference in Taguig City near Manila on Jan. 20, 2020. (NNA)

MANILA, NNA – The third telco player of the Philippines, Dito Telecommunity Corp., has announced that it is on track to launch services in March 2021 as it gets fresh funding of $500 million from the Bank of China.

The China-backed consortium reiterated that it has enough resources to be a major operator and compete effectively with two current players in the country's growing telecommunications industry.

In a press conference on Thursday, Adel Tamano, chief administrative officer of Dito, clarified that its commercial operation is scheduled to begin in March next year, and not July this year as reported earlier, attributing this to a “misunderstanding".

He explained that the technical rollout this July is meant for the government to do audit checks to ensure that the company is fully committed in providing a 27 Megabits per second (Mbps) internet speed when it launches its service to 37 percent of the population.

Dito, a consortium led by Philippine president Rodrigo Duterte’s pal businessman Dennis Uy, also sought to allay cybersecurity fears over its partnership with Chinese government-owned China Telecom Corp., which has a 40 percent stake in the consortium.

“We have a commitment to the government that we are cyber-secured and that our network will not be used against our national security. That’s a very firm commitment,” said Dito chief technology officer Rodolfo Santiago.

Philippine senators had raised concerns about espionage after Dito signed a deal to build communication facilities inside army bases last year.

While Dito is “heavily leaning” on China Telecom as its technology partner, the company has assured that tight measures would be put in place to ensure national security. These include those in its cybersecurity plan submitted to the National Telecommunications Commission (NTC).

Santiago said the company also worked on safeguards in close collaboration with the national security adviser and the armed forces.

Ties with China have been improving after Duterte took office as the government sourced funds and investments from Beijing for ambitious infrastructure developments.

President Duterte had also called for the entry of a third teleco in the country to improve services by competing with Globe Telecom Inc. and PDLT, Inc., which have been operating in the Philippines for several decades.

Dito, formerly called Misatel, is led by Uy’s Udenna Corp., its subsidiary Chelsea Logistics and China's state-run China Telecom.

“The network that we already built is already secured…That’s why we are very confident that we can do it because our funding is already secured,” Santiago told NNA on the sidelines of the press conference.

Tamano said a $500 million funding from the Bank of China would also be used for the installation of 1,600 cell site towers by July of 2020.

Santiago said there will be a network pre-testing in September to check its stability before the commercial launch.

“We want to launch as early as possible when we are really ready to provide a good service," said Tamano when raising the possibility of an earlier launch before March deadline next year as required by NTC.

Though the country's internet speeds have improved - at 16.06 Megabits per second for mobile and 25.91 Mbps for fixed broadband, they still fall below global averages of 26.12 Mbps and 57.91 Mbps respectively, according to Speedtest Global Index.

Under telco rules, Dito must provide an internet speed of 55 Mbps to 84 percent of the population over a five-year period and adequate funds to deliver its commitments - P257 billion ($5.068 billion) over that period, including P150 billion ($2.958 billion) for its first year of operation.

Aside from the Bank of China, Tamano said many foreign banks have expressed interest to offer loans.