Globe doubts new telco player can deliver on its commitments

By Denise A. Valdez
GLOBE TELECOM, Inc. expressed doubt the new major telco player can deliver the elevated level of service it promised during the first year of its operations, noting that it will likely face the same challenges faced by the incumbents in building network infrastructure.
Globe President Ernest L. Cu told reporters in a chance interview on Tuesday the provisional new telco player, Mislatel Consortium, is unlikely to succeed in providing an average minimum broadband speed of 27 Megabits per second (Mbps) in its first year of operations and 55 Mbps on its second, as indicated in its bid.
“There’s no telco that can do that in one year, in my opinion… To me, it’s 24 months. Let’s see. We use the same equipment, we go through the same permitting process. Let’s see,” he said.
According to an August report from wireless coverage mapping company OpenSignal, the average download speed for Globe is 5 Mbps, and for its rival PLDT, Inc., 7.5 Mbps.
Information and Communications Technology Chief Eliseo M. Rio, Jr. said in a social media post on Saturday the consortium of China Telecommunications Corp., Dennis A. Uy’s Udenna Corp. and its subsidiary Chelsea Logistics Holdings Corp. — named together Mislatel Consortium from the name of franchise holder Mindanao Islamic Telephone Company, Inc. (Mislatel) — is now cleared to be declared winner in the bidding as its competitors’ motions for reconsideration have already been denied.
“Mislatel made a commitment to greatly improve our telecommunication industry that can bring us at par with Singapore and is putting a hefty performance bond (P24B) if they fail in its commitments in a five-year period,” Mr. Rio said.
The bidding’s terms of reference require the new telco player to submit an annual audit of its commitments to the NTC, which if unfulfilled, will require it to forfeit its performance security and give back its awarded radio frequencies to the government.
Globe’s Mr. Cu said aside from Mislatel’s speed commitment, its population coverage commitment of 37.03% in the first year and 84.01% cumulative coverage over a five-year period is also questionable.
“I don’t think there’s any telco in the world that in their first year of operations, other than (India’s) Reliance Jio, that they get significant market share from incumbents in the first year. But the caveat there is that Reliance Jio, before they launched, was building for four to five years… They had a few hundred plus thousand cell sites by the time they launched… (For Mislatel), this is their required, (that) they’ve covered x% of the country…,” he said.
The success of Mislatel Consortium largely hangs on the contribution of seasoned telco China Telecom, one of the biggest mobile telco providers in China. But Mr. Cu said operating in the Philippines is a different case as it sets different conditions for companies.
“There’s nuances in every country with regard to telco. The regulatory framework is different. We have a very complex regulatory framework from national government down to LGU (local government unit), down to the barangay level. So I hope they took that into consideration when they promised they would roll out that much in one year. Because today, we still have pending cell sites…,” Mr. Cu said.
Dissatisfied with the reign of Globe and PLDT, President Rodrigo R. Duterte sought to find a “third telco” that would break their duopoly.
Mr. Rio himself, in his Saturday social media post, noted the incumbents did not have to commit topnotch services as what is required from the new telco player.
“They never posted any performance security. For the first time in our history, we required a new telco player to come up with time-bound commitments and putting their money where their mouths are,” he said.
Amid the government’s hopes for Mislatel’s success, both Globe’s Mr. Cu and PLDT Chairman Manuel V. Pangilinan said they don’t see the entry of a new competitor to post immediate impact on revenues and subscriber base.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.