Incumbent players PLDT and Globe Telecom may have to finally deal with a serious competitor backed by a Chinese telco giant starting in the first quarter of 2021.
This as the coronavirus disease 2019 (Covid-19) pandemic failed to dampen Dito Telecommunity’s multi billion-peso network buildup.
The group — a consortium of state-run China Telecommunications and Davao-based businessman Dennis Uy — sees itself breaching its initial investment of P150 billion for the first year amid its aggressive network deployment across the country, its chief administrative officer Adel Tamano said during a previous virtual briefing.
As of December 8, the company already established 1,900 cell towers — a fast development — which should be noted for rolling out cell sites, given the fact that bureaucracy problems have been haunting the industry for decades.
The figure was already higher than the 1,300 base stations it needed to meet the targets of 37-percent population coverage and 27 megabits per second (Mbps).
Tamano also said during a Senate hearing the number was “more than enough” to meet the small telco’s committed services for the first year.
This made Dito on course for its March 2021 commercial launch or “earlier,” Tamano said last December 10. Dito is eyeing to initially tap key cities Metro Manila, Cebu, and Davao.
For 2021, the group is looking to spend P27 billion. But Tamano said the number “could be more” as they target to build thousands of fourth-generation (5G) and fifth-generation (5G) sites.
Battle in the 5G sphere
While both Globe and PLDT have started offering their 5G network service to key areas in Luzon, Dito is bullish to keep up with the race.
Globe initially introduced its 5G services to its home subscribers last July 2019. It subsequently made this commercially available to mobile clients. PLDT’s wireless arm Smart Communications also opened its 5G network to its mobile users. Subscribers, however, must have 5G-ready smartphones to access the network.
Tamano even boasted Dito’s sites would be “the superior and authentic type of 5G.”
Endless national security issue
Despite all security allegations surrounding Dito — an issue that has been haunting the group since it secured the status as the third telco player in late 2018 — Tamano said they were “fortunate” to have China Telecom on board as it has the capacity to “reinvent” the Philippine telco industry.
Fears on potential espionage resurfaced after Defense Secretary Delfin Lorenzana signed the memorandum of agreement between the Armed Forces of the Philippines and Dito, providing the green light for the latter to establish network infrastructure in military camps.
Globe Telecom and PLDT — supported by foreign partners Singapore Telecommunications and Japan’s NTT Group, respectively — hold the same deals with the Armed Forces of the Philippines.
The new player has also tapped US cybersecurity providers Fortinet, NexusGuard, McAfee, Nessus, Veritas, Pentaho Data, IDAM Systems by BeyondTrust, Microsoft, Cisco ISE, Siemplify, ManageEngine and SolarWinds.
The group also hired ex-military officials to further ease Filipinos’ fears on possible cyber espionage.
Dito reiterated that it is a Filipino firm, stressing that it “will not and shall not comply with” the China National Intelligence Law.
Globe, PLDT ready for intense competition
With massive investments spent over the last years, current telco players are taking a proactive stance to maintain their dominance in the market.
Efforts from both groups were further boosted following President Rodrigo Duterte’s mandate to improve their service amid the pandemic — when work-from-home schemes and distance learning are being implemented to lessen the virus’ blow — or face his wrath as the top leader vowed he would do everything to shut them down.
“The next two years will be spent improving the telecommunications of this country without you,” the top government official said during his State of the Nation Address last July.
Earlier in December, PLDT and Globe reported to the Palace their respective accelerated network rollout.
For 2020, Globe deployed 1,300 new cell sites versus the 1,100 in 2019. Over 10,800 sites were also upgraded to 4G/LTE (long-term evolution) this year, up from 10,135 last year. It also fired up 708 5G sites in 17 Metro Manila cities, and Mindanao cities.
Its main rival PLDT’s Smart Communications, on the other hand, also stressed in the Palace briefing that it continued to invest in network build up, noting that it has so far spent P260 billion in the past five years, with P73 billion alone in 2019.
It reported to the Malacanang that Smart has over 10,000 cell sites, and 58,538 base stations across the country.
Both Globe and PLDT are looking to bolster their capital expenditures for 2021, with spending may reach P70 billion and up to P92 billion, respectively.
Thanks to common tower initiative
Taking advantage of the government’s initiative to open the sector to tower builders, PLDT, Globe and Dito have sealed deals with tower builders.
They are all banking on the ease of processing time for securing permits as it has been cut from more than 200 days to around 16 days.
That was ordered through a joint memorandum circular penned by the Department of Information and Communications Technology (DICT), Anti-Red Tape Authority, Department of the Interior and Local Government, Department of Public Works and Highways, Department of Human Settlements and Urban Development, Department of Transportation, Civil Aviation Authority of the Philippines, Department of Health, and the Food and Drug Administration.
More than two years after the government planned out the common tower project, the DICT last September 15 issued provisional independent tower company (ITC) certificates of registration for 23 firms that have already secured deals with the former.
The tower companies are Aboitiz Infracapital, Inc., ACODA Towers SDN BHD, Alt-Global-Solutions Inc., Transcend Towers Infrastructure (Philippines), Inc., China Construction First Group Corp. and Wingan Construction and Development Corp., China Construction Yangtze River (M) SDN BHD, China Energy Equipment Co., Ltd, CREI Management Services FZE, Desarrollos Terrestres, Inc., EEI Corporation, Frontier Tower Associates Philippines, Inc., IHS Holding Limited, Inforient Sdn. Bhd., ISOC EDOTCO Towers, Inc., ISON Tower Ltd. Inc., J.S Cruz Construction and Development Inc., MGS Construction Inc., Phil-Tower Consortium Inc., RT Telecom SDN. BHD., Shinheung Telecom Co., Ltd., Tamoin Industrial Services Corporation, Tiger Infrastructure Pte. Ltd., and UA Withya Public Company Ltd.
The certificate, it noted, serves as the provisional authority to own, construct, manage and operate one or more passive telecommunications towers infrastructure.