Poe tells Dito: Deliver on commitments first before franchise renewal

Senator Grace Poe told Dito Telecommunity to deliver on its commitments first before expecting a smooth franchise renewal.

In a Senate hearing on Monday, December 7, Poe, the Senate public services panel chairperson, said there is "enough time" to tackle the telco's franchise before it expires in 2023.

Dito chief administrative officer Adel Tamano said, however, that it would be better if the franchise is renewed "well before" its expiry.

"If the question is 'Can we wait until 2023?'...I think to protect the public, since they will be investing in SIM cards and phones from our company, we humbly ask this honorable committee to approve it well before that," Tamano said.

Poe then asked: "You're not going to use the franchise as a collateral to be able to get more investments. Is that what's happening?"

"There will be more confidence in the viability of our enterprise if the franchise is extended," Tamano replied.

Earlier in the hearing, Tamano said Dito has a 70-30 debt-to-equity ratio. It currently has P20 billion in equity and has financed its P150-billion initial rollout this year through debt and shareholder advances.

Several foreign banks will also be lending Dito money, including the Bank of China.

Senate Majority Leader Juan Miguel Zubiri asked: "Would it be more difficult to get your loan approved if you don't have a franchise when you roll out [commercially] in March? I think that's one of the problems."

Tamano answered in the affirmative.

But Poe said Dito should have had a forecast of how much was needed to be spent before the firm applied for the franchise and agreed to the commitments as 3rd telco player.

"They should not have anticipated the renewal of their franchise, unless they are able to produce the commitments without the additional funding," said Poe.

"I don't want the committee to be a hostage of that," she added.

Poe pointed out that the upper chamber needs to evaluate first whether Dito was able to deliver on its commitments.

"If they are able to do that, then we will be able to determine if we will give them [an] additional 25 years.… We're just here to safeguard the commitments made to the government," Poe said.

Under Dito's certificate of public convenience and necessity, it needs to set up 1,300 towers to cover 37% of the population and achieve a speed of 27 megabits per second.

According to the National Telecommunications Commission presentation on Monday, Dito has already surpassed the number of towers committed, with a total of 2,066 as of November.

Dito will be undergoing a technical audit in January 2021. The public rollout will be in March next year.

According to Dito, a friendly user test is currently being conducted in select areas in Metro Manila, the Visayas, and Mindanao. – Rappler.com

Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.