[EDITORIAL]: #AnimatED: China’s telco play in the Philippines

Livestreamed on Facebook and watched real-time by everyone who cared to know, the bidding for the Philippines’ 3rd telco player was as transparent as one could get, says the Department of Information and Communications Technology (DICT). And it was as high-tech as one could get, too, because it’s the computer, not human beings, that totaled the score for the winning bidder.

This isn’t saying much. For in truth, there was no bidding in the way we know how that process is defined. (READ: Blockbuster to lackluster: #TelcoSerye drama leaves people puzzled)

Two of the 3 who made it to the final phase last November 7 were eventually disqualified, knocked out before they could even get into the ring. 

The road to D-Day was paved with new protocols, new rules, and new timelines that observers say only the muscled with insider information could comply with.

And the winner turned out to be the favored one.

This is not to play killjoy to the value of competition that a new market player always brings. The entry of a 3rd telco player to break the duopoly of Smart and Globe is a long time coming. Years of consolidation and a few misses by other companies had given telco control to these two. 

Filipino consumers deserve more choices, and there is no better driver for better service than the thought of another company threatening to eat into one’s profit pie. That’s what President Rodrigo Duterte said had motivated, even angered him, to fast-track the selection of a new player.

Duterte had no one else in mind but his best ally, China. As early as last year, he invited the Asian giant to invest and help boost the telco sector.

Through his now resigned spokesman Harry Roque, the President laid it all out in December 2017: state-owned China Telecommunications Corporation (China Telecom) should be able to begin its operations in the first quarter of 2018; the relevant agencies have also been ordered to “approve all licenses and applications within 7 days” upon submission by the Chinese company; and China Telecom, in keeping with the provisions on foreign ownership in the Constitution, has to start partnering with a local consortium.

Eventually, sober voices prevailed. Not to mention mild hysteria from the security sector that was aghast at the possible invasion of our communication infrastructure by a country that has been ransacking our islands without end!

Thus began Eliseo Rio Jr’s parade of fairness called public bidding.

Constantly hammered by Duterte for postponing deadlines to allow interested parties to prepare, the DICT boss (for not too long, as Senator Gringo Honasan waits in the wings) acted like the wise king wielding his fair-and-square stick throughout the process.

He was seemingly oblivious to behind-the-scenes moves that are aplenty in any government-sponsored deal as big as this one, and was clinging to the science of his automated selection process.

The National Telecommunications Commission, layer after layer, presented requirements that eventually removed everyone from the ball game except the player backed by a foreign state. (Disclosure: The COO of PT&T, one of the disqualified bidders, is a co-owner of Dolphin Fire Group, which has a stake in Rappler. Dolphin Fire is an investment house owned by Menlo Capital Corporation.)

In the end, the President got his wishes – and more.

China Telecom smartly partnered with presidential pal Dennis Uy, the Philippines’ newly minted tycoon from Davao.

Here’s the reality check.

First, whatever is said about the quick rise of Mr Uy, no local or foreign businessman in the Philippines is convinced that he has the wherewithal to go the long mile and battle it out there with the giants. In reality, goes the buzz among the bothered but timid business folks, this is purely going to be a Chinese play.

Second, aside from the legal cases contemplated by losing parties, there’s no stopping the ordinary Juan from questioning the role of China Telecom in a public utility venture. This strikes at the heart of Philippine sovereignty and security.

This is a company fully-owned and controlled by a hostile state – Duterte’s friendship with Xi Jinping notwithstanding. That it was cajoled into coming in by no less than our leader is an unthinkable scenario in other countries. 

Third, a Chinese play in our communications sector is a significant inroad into our lives. We simply have to sit down and imagine its operational impact. For starters, will China bring its own people and equipment to meet the deadlines imposed on it?

Fourth, the core issue in the telco sector has always been effective or ineffective state regulation. In countries with the best telco practices, the key has always been ensuring that government takes consumer interest to heart and is able to guard against rates and services that are not up to par.

Even before contemplating a 3rd player, the Duterte administration should have focused on strengthening its regulatory capacity vis-a-vis a telco. A new player is never a guarantee of good service.

But the President, invoking public interest, is a man in a hurry.

Unfortunately, this also serves the interest of a covetous neighbor that has wronged us so many times. 

What can – and shall – we do about it? – Rappler.com