ITEM: The Philippines desperately needs someone to launch a third operator to break the current duopoly of PLDT and Globe Telecom, and President Rodrigo Duterte sincerely hopes it will be China.
Reuters reports that President Duterte has offered China the “privilege” to be the country’s third telco, according to his spokesperson:
Duterte made the offer last week to visiting Chinese Premier Li Keqiang, the latest sign of his pursuit of closer political and economic ties with a country with which the Philippines has a long history of territorial disputes and mistrust.
Obviously, the third operator won’t be China itself but one of its existing telcos. Presidential spokesman Harry Roque didn’t name names, and China’s foreign ministry hasn’t commented on whether it’s even interested.
As for why China:
Ties with China have warmed under Duterte, who has put aside disputes with Beijing and wants it to play a key role in building and funding urgently needed infrastructure, from highways and ports to railways and power plants.
Duterte recognised that China had the money and technology to make a difference in the Philippines, Roque said.
The “difference” in this case is the fact that despite grand efforts by PLDT and Globe to roll out both fixed broadband and LTE networks across the archipelago to foster adoption of digital services, average broadband connection speeds in the Philippines are the slowest in Asia, according to Akamai. A recent report from OpenSignal found that in terms of average 4G speeds, the Philippines ranks 74th out of the 77 countries surveyed.
Critics blame that on the general lack of competition. The Philippines’ telecoms space gained a number of new players during liberalization in the 1990s, but now only incumbent PLDT and rival Globe survive.
Last month, government-owned National Transmission Corp (TransCo) announced plans to diversify into the telecoms arena, but it needs its charter amended by the government first. TransCo isn’t the first power company to see telecoms as a logical sector to break into – it’s not even the first in the Philippines. Meralco tried it in 2009 with its broadband-over-power-lines project with PLDT. It failed. (And it arguably wouldn’t have counted as a third operator anyway since PLDT owns a controlling stake in Meralco.)
Meanwhile, whether any Chinese telco takes Duterte up on his offer will likely depend on what it thinks of the country’s foreign investment rules, Reuters reports:
Opening up the telecoms sector is complex, however, as the constitution limits foreigners to owning just 40 percent of a domestic telecoms company, a disincentive for foreign firms to invest in a fast-growing market of more than 100 million people.