Duterte wants Chinese company to be 3rd PH telecom player

MANILA, Philippines (UPDATED) – Philippine President Rodrigo Duterte offered to China the chance for one of its firms to be the 3rd major telecommunications company in the Philippines, with the goal of ending the duopoly in the vital industry.

This was announced by Presidential Spokesman Harry Roque on Monday, November 20, during a Malacañang press conference.

"During the bilateral talks between President Duterte and the Chinese Premier, the President offered to the People's Republic of China the privilege to operate the 3rd telecoms carrier in the country," said Roque, referring to the November 15 meeting of the two leaders in Malacañang.

The Philippine government is now just waiting for Chinese telecom companies to submit their proposals. Roque said the government will only take "45 days" to determine if the offer will be taken.

These companies, being foreign-owned, will have to comply with the 1987 Constitution provision limiting foreign ownership of companies in the Philippines to 40%, said Roque.

The offer was made to China because of its proven capability to provide telecom services to millions of users, he added. (READ: PH internet 'no good'? Telcos, PCC react to Jack Ma)

The last time the Philippine government entered into a communications deal with a Chinese company was in 2007 when it signed a multimillion-dollar deal with Chinese firm ZTE for a national broadband network.

The project, however, was riddled with anomalies, including including allegations of overpricing and corruption among government officials who brokered the deal. 

Faster internet

The offer to China was made on the same day 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.

The deal, called the Luzon Bypass of the Pacific Light Cable Network, will provide bandwidth of two terabits per second, said Roque. (READ: Philippine gov't, Facebook partner for 'ultra high-speed' broadband

"The consumers can look forward now to better telecoms, not just in terms of cellular technology but also in terms of internet speed, as well as access," said Roque.

The agreement with the Facebook subsidiary should have been signed in December 2016, when the Department of Information and Communications Technology (DICT) was still helmed by Rodolfo Salalima. Roque said Salalima was accused of delaying the signing in order to "preserve" the duopoly of PLDT-Smart and Globe Telecom.

"It was not signed by the former secretary of DICT and this was one of the areas pinpointed by Cabinet investigators as an area of conflict of interest for the former secretary of DICT," said Roque.

Salalima, who had served as Globe Telecom's top lawyer before heading the department, resigned last September. – Rappler.com

Pia Ranada

Pia Ranada covers the Office of the President and Bangsamoro regional issues for Rappler. While helping out with desk duties, she also watches the environment sector and the local government of Quezon City. For tips or story suggestions, you can reach her at pia.ranada@rappler.com.