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Gov't bias toward China seen in 3rd telco race

MANILA, Philippines – The win of Dennis Uy’s Udenna Corporation and China Telecom for the 3rd major telecommunications player slot hints at government bias for Beijing, market think tank Fitch Solutions Macro Research said.

“The selection of China Telecom, which follows the almost immediate disqualification of the two other bidders, hints at the government’s bias towards Chinese involvement in the telecoms sector, and is a clear sign of Duterte’s warming posture towards China,” the think tank said in its analysis.

The tandem, called Mislatel, was declared as the country’s new major player after contenders Philippine Telegraph and Telephone Corporation (PT&T) and Chavit Singson’s Sear Telecom were disqualified due to incomplete documents.

The National Telecommunications Commission (NTC) and the Department of Information and Communications Technology (DICT) dismissed criticism that the selection process was crafted to favor the China-backed consortium.

Moreover, observers like Democracy.net lauded the bidding process for its transparency.

Both PT&T and Sear Telecom have taken legal actions and are still hopeful to be considered for the slot.

Technical expertise

Despite commenting on the government’s bias toward China, Fitch Solutions conceded that China Telecom has the ability to shake up competition. (IN CHARTS: Udenna Corp-China Telecom's promises)

“We believe that the selection of China Telecom would have been, from a technical perspective, the most feasible one as the state-owned telco has the experience, scale and financial capability needed to disrupt the Philippines telecoms sector that is otherwise lacking at the other contenders,” it said.

The think tank said that Chinese state-owned entities have an “excellent track record” in setting up their network.

While China Telecom has money and expertise, some legislators and security experts flagged Beijing’s tendencies to monitor and control the internet.

A report said that China Telecom has been involved in the misdirection of large amounts of internet traffic to Beijing, likely in an effort to assist the Chinese government’s “surveillance of Western countries and companies.” (READ: [ANALYSIS] Disturbing red flags in the 3rd telco selection)

Udenna Corporation Spokesperson Adel Tamano assured consumers that they will not allow national security to be compromised. – 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.

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