China Mobile or China Telecom as Philippines’ 3rd major telco?

Chrisee Dela Paz

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China Mobile or China Telecom as Philippines’ 3rd major telco?
Two state-run Chinese companies have set sights on competing with PLDT Incorporated and Globe Telecom Incorporated

MANILA, Philippines – Is it going to be China Mobile Limited or China Telecom Corporation Limited?

Socioeconomic Planning Secretary Ernesto Pernia disclosed that two of China’s top 3  telecommunications players have set their sights on the Philippine market, wanting to challenge the industry duopoly of Globe Telecom Incorporated and PLDT Incorporated.

“I recall saying both telcos are interested and offered to be a 3rd player, and the government has considered them,” Pernia told Rappler in a mobile phone reply on Monday night, November 20. He, however, said he is not privy to the latest development.

This disclosure was made amid President Rodrigo Duterte’s offer for China to become the Philippines’ 3rd major telecommunications player.

Back in 2007, an attempted entry by China’s ZTE Corporation to establish a national broadband network was bogged down after allegations of kickbacks and overpricing.

For a Chinese telco firm to enter the Philippine telecom market, it has to partner with Philippine corporationsUnder the 1987 Philippine Constitution, only companies owned at least 60% by Philippine nationals or corporations may operate as a public utility. (READ: PCC: Make policy changes to open telco, energy markets)

Listed on the New York Stock Exchange and Hong Kong Stock Exchange, China Mobile is the world’s largest phone carrier by subscribers with 849 million mobile customers and 77.62 million wireline broadband customers by end-2016, its annual report showed.

China Telecom follows suit with about 215 million mobile subscribers, 123 million wireline broadband subscribers, and 127 million access lines in service as of end-2016, data from its annual report showed.

Seeing a large share in their home market, these two state-run Chinese telcos have been slow in expanding beyond China. It was just in 2014 when they started buying stakes of telco firms outside China – starting with Thailand, Pakistan, and Brazil.

Other firms interested

Locally, Philippine government-run National Transmission Corporation (TransCo) has also expressed interest in diversifying into telecoms by using its power transmission assets. To do that, it has to ask Congress to amend its charter so it could offer telecommunications services and products.

TransCo had said 10 firms, including some Chinese companies, have signified interest to partner with them. 

Another firm eyeing the 3rd major telco slot is listed Philippine Telegraph & Telephone Corporation (PT&T)TransCo President Melvin Matibag had said PT&T wrote to his firm, proposing to enter into a lease agreement with the state-run firm for the use of its assets.

PT&T maintains over 500 kilometers of redundant fiber optic routes throughout Metro Manila and surrounding areas. Last year, it secured a franchise extension of another 25 years.

Now Corporation of Mel Velarde has also been asking the National Telecommunications Commission (NTC) to reallocate mobile frequency to the company to be able to compete with the two telco giants. (READ: PLDT, Globe, Meralco: Yes to foreign players)

Last week, the Philippine government signed a deal with a Facebook subsidiary to build “ultra high-speed” broadband infrastructure, which would make the government virtually another major player in the telecommunications industry.

Dubbed as the Luzon Bypass of the Pacific Light Cable Network, this is seen to provide bandwidth of two terabytes per second, said Roque. (READ: Philippine gov’t, Facebook partner for ‘ultra high-speed’ broadband)

Back in October, Jack Ma, the Chinese tycoon behind global tech giant Alibaba Group, expressed his disappointment over the quality of Philippine internet services, saying it is “no good.”

PLDT and Globe, meanwhile, have been activating more cell sites, after they bought all the telecommunication assets of San Miguel Corporation, which was supposed to introduce a 3rd major telco player, along with Australia’s Telstra Corporation. (READ: San Miguel selling telco assets to PLDT, Globe)

Last May, Akamai Technologies’ Global State of the Internet Report showed that the Philippines has the slowest average internet speed in Asia Pacific.

Its average connection speed is just 5.5 Mbps, falling short of the global average internet connection speed of 7.2 Mbps. This, however, was an improvement from previous records. –

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