MANILA, Philippines (UPDATE 2 4 p.m., March 11)— Old phones are presenting an early roadblock to the ambitions of Dito Telecommunity Corp., whose advanced services are unlikely to be compatible to a fixture of Philippine countryside where the telco chose to launch.
This key hurdle was raised by Democracy.net.ph, an ICT advocacy group tasked by the Senate public services committee of further assessing the Dennis Uy-led telco after going online last March 8.
“(The) feature phone market in the Philippines is still very high especially used by (classes) D and E, or our kababayans that run on 2G frequency,” Pierre Galla, engineer and co-founder of Democracy.net.ph.
“I’m surprised Dito Telecommunity restricted their list (of compatible phones),” he added.
Feature phones utilize older systems, and indeed would not accept a Dito SIM card that in default runs in 4G or 5G in some cases. To be fair, Dito's hands are also tied by frequencies they secured from government which limit the telco to offering 3G services at the minimum.
Yet at the same time, Dito also chose to start business in Visayas and Mindanao, going online in 15 areas including urban centers, Cebu and Davao. While in these major cities economic development may be closer to the level of Metro Manila, poorer rural areas which Dito targets to capture may be unable to afford buying smartphones with 3G capacity and avail of their services.
It was a pilot strategy repeatedly questioned by reporters during monthly breifing with Dito officials, especially for a newbie telco out to capture a market share in poorer Filipinos by offering superior service to rivals Globe Telecom Inc. and PLDT Inc. with legacy systems. In those instances, Dito would only express optimism, counting on better service to prompt end-users to upgrade their phones.
As it is, Dito has so far not yet offered a plan that bundles a phone and its SIM card that alone costs P199.
Galla estimated that at least 60% of Filipinos continue to use legacy phones like Nokia 3310 and 3210, including by small firms like sari-sari stores for their loading or mobile remittance business.. Separate data from Statista, a data provider, put local smartphone penetration at just 57.6% of population in 2019, although that number likely already went up last year.
So far, Dito has released an initial list of 68 phone models where its SIM cards would work and plans to update the same. The list includes latest models of Korean phone, Samsung, as well China’s Huawei Technologies Group Co. Ltd. Local brands, MyPhone and Cherry Mobile, were likewise named.
“Those not in the list, we cannot say that they’re not compatible. What we’re saying is that these phones did not undergo a collaborative test with manufacturer to protect the public and that there may be technical issues that are unforeseen,” Rodolfo Santiago, Dito’s chief technology officer, told senators.
But Dito’s technology is too advanced, even older smartphones manufactured before 2015 may not be able to accept its SIM, Galla assessed. Adel Tamano, Dito’s chief administrative officer, assured senators other phones would soon be found compatible to Dito.
“That was just a partial list…We don’t want them to waste their money to buy our SIM, buy our services and they cannot fully utilize their phones because of compatibility,” Tamano said.
The Senate public services committee was hearing Dito’s application for a new franchise since its old one, under its old name Mindanao Islamic Telephone Co., is bound to expire in 2023. The committee, in the end, passed its franchise bill on first reading.
Dito’s entry to the telco market was welcomed by senators in hopes the competition it brings would prompt better broadband services.
Shares in Dito CME Holdings Inc., bound to get an indirect majority stake on Dito telco through a share swap deal with Udenna Corp., sank as much as 25% to close at P9 apiece on Wednesday on investor reaction to the transaction.
Editor's note: Added photo of Dito-supported handsets. Included detail in Dito's frequencies limited to at least 3G.