Philippines identifies second choice for third telecom player

MANILA, Philippines — The Philippines now has two choices for a third telecom player that would disrupt a longstanding duopoly that has angered consumers in a nation said to have the slowest internet speed in the Asia Pacific.

President Rodrigo Duterte has invited China to be his country’s third telecom carrier. He made the offer to Chinese Premier Le Keqiang, who visited the country last November.

A third telecom provider is targeted to be up and running by the first quarter of 2018.

Presidential Communications Operations Secretary Martin Andanar earlier revealed that China Telecom would become the third player in the country's telecom industry, backed by a consortium of Filipino businesses.

Aside from China Telecom, Andanar told DWIZ radio on Tuesday that Philippine Telegraph and Telephone Corp., which is in talks with a South Korean telecom firm, is also interested to be a new telecom provider.

In a disclosure posted on the Philippine Stock Exchange, PT&T confirmed that the company is in an “advanced stage” of discussions on a partnership deal with a South Korean telecom firm, which PT&T has yet to identify.

“Disclosure will be made as soon as an agreement has been finalized with the South Korean telecom firm,” PT&T said.

“PT&T is bound by a non-disclosure agreement prohibiting it from disclosing the identity of the said Korean firm,” it added.

According to the company, PT&T had also met with representatives of China Telecom but “no material developments since then.”

To ensure the fast entry of a new telecom carrier, Duterte had warned courts against “prolonging the process” by issuing injunctions.

“This is a matter of national interest for the benefit of the public,” he said.

Philippine Competition Commission willing to help

Philippine Competition Commission Chairman Arsenio Balisacan was quoted as saying in a report by Nikkei that the country’s antitrust watchdog is more than willing to facilitate the arrival of a third telecom player.

"We are also open to helping the government in designing the [entry] terms at least from the competition lens,” Balisacan said.

Duterte earlier threatened incumbent providers PLDT Inc. and Globe Telecom Inc. with new competition from China if they do not shape up.

Last year, PLDT and Globe together agreed to buy conglomerate San Miguel Corp. out of the sector for $1.5 billion, pledging to invest heavily to boost internet service. The acquisition was the country's biggest corporate transaction in nearly three years.

The Court of Appeals, in a decision dated October 18, ordered the PCC to permanently stop its review of the deal and recognize its validity.

Meanwhile, moves to open up the Philippines’ telecom industry might face some challenges. Under the Constitution, foreign investors are only allowed up to 40 percent on certain businesses and industries.

The Duterte administration had been working on easing foreign ownership limits by relaxing the Foreign Investment Negative List (FINL), particularly in the areas of retail trade, practice of professions, public utilities and infrastructure contractors.