Senate panel delays renewal of DITO franchise until third telco provides 27mbps service

MANILA – The Senate Public Services Committee postponed the renewal of the DITO Telecommunity franchise on Monday, saying the third telecommunications company should first demonstrate that it can deliver the “promised” services.

DITO, a consortium between Davao mogul Dennis Uy, Udenna Corp, and China Telecom, previously pledged to provide at least 27 Mbps of internet speed at 37 percent or about 7,425 barangays in its first year of service.

Coverage is expected to increase to 50 percent in its second year, 70 percent in its third year and 84 to 90 percent in its fourth year in business, said DITO’s Chief Administrative Office, Adel Tamano.

“When DITO applied for this franchise, they should have had a forecast of what they were going to spend,” Senate Public Utilities Committee Chair Grace Poe said at the telecommunications company’s franchise hearing.

“They should be able to fulfill the initial commitment that they made if they can, then we will give them the additional 25 years,” he said.

Tamano said that DITO’s viability would depend on how the public reacts to its services, which the company promised to be faster and “more affordable” compared to what Smart and Globe offer.

“For this year and next, we are confident that we have sufficient funds. What will be truly critical … is that we have our services next year,” Tamano told senators.

“There will be more viability in our company if our franchise is approved,” he said.

Senate Majority Leader Juan Miguel Zubiri endorsed DITO’s push to renew its 25-year franchise before its current license to operate expires in 2023 and said most franchise applicants only borrow once once your permits have been approved.

“We have a lot of applicants who are shell companies right now,” Zubiri said.

“Without loan approval, they won’t be able to do all that [deliverables]. They are not as big as Ayala or MVP (Manny V. Pangilinan), “he said.

Uy, a Davao tycoon who has expanded his business portfolio since President Rodrigo Duterte came to power in 2016, owns 60 percent of DITO, while China Telecom owns a 40 percent stake.

“They should not have anticipated that they will get a renewal of their franchise unless they are able to produce the commitments that they were able to make,” Poe said.

“What we’re trying to avoid here is that other applicants will anticipate a renewal and no longer launch unless they get that franchise renewal. I don’t want a committee to be held hostage to that,” he said.

“We are only here to safeguard the commitments made to the government,” he said.

Zubiri agreed with Poe that “deployment commitments” must be made regardless of the renewal of the DITO franchise.

Opposition senator Risa Hontiveros praised the committee’s decision to postpone the renewal of the DITO franchise, and said lawmakers should further study the effects of the entry of the third telecommunications company considering that China owns a part of the company. .

“It’s a pretty unique franchise, a unique company … because of the national security issues that have been raised,” he said.

“Considering it is a quarter-century franchise … Ang dami is negotiating a resolution of anger with China here in our region,” he said.

China previously passed a law that obliges all Chinese citizens, including businessmen with foreign interests, to support national intelligence work.

The controversial law has led other governments, including the United States, to avoid deals with Chinese companies, citing national security concerns.

DITO is expected to launch its internet packages next year, including a “real 5G” service.

RELATED VIDEO