Dennis Uy’s Mislatel guns for best telco, but faces franchise issues

Ralf Rivas
Dennis Uy’s Mislatel guns for best telco, but faces franchise issues
Dennis Uy dreams of fast internet speeds and great coverage at reasonable costs. But first, he needs to overcome several legal obstacles.

MANILA, Philippines – “Humility aside, we don’t want to be just the 3rd telco, we want to be the best telco. A telco that is fast, affordable, and most importantly secure,” said Davao City-based businessman Dennis Uy during the Senate hearing on his telecommunications venture on Thursday, January 24.

Despite having no experience in the telco space, Uy told lawmakers that he can upgrade the country’s lagging internet speeds. (IN CHARTS: Udenna Corp-China Telecom’s promises)

His listed firms, Udenna Corporation and Chelsea Logistics, teamed up with China Telecommunications Corporation and Mindanao Islamic Telephone Company to form the Mislatel consortium. (READ: How to grow a business, according to Dennis Uy)

Uy promises to jack up internet speeds to at least 55 megabits per second and intends to spend a whopping P257 billion in 5 years.

The problem? The consortium may not have a valid franchise to operate.

Franchise snag

Senate Minority Leader Franklin Drilon said Mislatel’s franchise is void.

Mislatel had been granted a franchise in April 1998, but was not able to operate within a year after the franchise was granted.

Drilon reiterated that Mislatel was obliged to operate within one year from the approval of its franchise or operate continuously for 3 years.

“The franchise is a privilege and one of the conditions is you must operate within one year, and Mislatel is basically a paper corporation,” Drilon said.

Mislatel president Nicanor Escalante explained that the company was granted provisional authority to operate in Maguindanao.

However, the peace and order situation did not allow the company to push through with the endeavor.

Drilon also slammed Mislatel for not being able to get congressional approval to change the controlling stake of the company.

With these snags, Mislatel’s provisional 3rd telco status may be canceled.

Senator Grace Poe, who chairs the committee on public services, placed the burden on the National Telecommunications Commission and the Department of Information and Communications Technology.

Poe said the agencies should have spotted immediately if Mislatel had a valid franchise before declaring it as the winner.

Pandora’s box

Meanwhile, Senate Majority Leader Juan Miguel Zubiri warned the panel that becoming “too strict” with Mislatel’s franchise may open a Pandora’s box.

According to Zubiri, around 90% of congressional franchise holders violate some provisions of the law.

He added that the law is not clear on who revokes the franchise.

“We should not be too strict. If we will be, let’s cancel everything and let’s start a review,” Zubiri said. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.