Force majeure an option if virus impedes telco rollout, says DITO

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Dito Telecommunity

By Arjay L. Balinbin, Reporter

DENNIS A. Uy’s DITO Telecommunity Corp. on Wednesday said it has the option to invoke force majeure in case the novel coronavirus outbreak impedes the rollout of its services.

But the company said it has remedial measures to address the impact of the deadly virus on its rollout, one of which is to source materials, especially steel, from markets outside China.

Adel A. Tamano, DITO chief administrative officer, said under Philippine laws an outbreak such as the coronavirus can be considered a reason to declare force majeure.

“We can use that as legal basis. Let’s say if we have a delay, we can ask for a grace period. That’s the legal side [of it],” he told reporters on Wednesday on the sidelines of the inspection of a tower in San Francisco del Monte, Quezon City.

DITO Chief Technology Officer Rodolfo D. Santiago noted that Hubei province, where the new virus is believed to have originated, is one of the manufacturing hubs of China.

‘Yung impact sa rollout namin ay ‘yung sa (The impact on our rollout is on the) steel or tower components and fiber cable,” he said.

“But our vendors are confident since they have manufacturing plants in other countries. They would request their subsidiaries… to prioritize the supply for the Philippines,” he added.

Despite the situation, Mr. Tamano said DITO would stick to the timeline.

“We will find ways to mitigate all the effects of the situation so that our rollout will not be delayed,” he said. “Our position is very strong. Unless we have exhausted all the possible alternatives, that’s the only time we would consider citing a force majeure situation.”

DITO said last week that its commercial launch would be in March 2021 as indicated in its Certificate of Public Convenience and Necessity (CPCN). The “technical launch” will happen in July.

The National Telecommunications Commission will audit DITO’s compliance with the government’s requirement to cover 37% of the population nationwide with 27 megabits per second (mbps) during the “technical launch,” Mr. Tamano said.

A pre-commercial trial will begin in September, he said, adding that the commercial launch can also happen before March 2021.

For his part, Mr. Santiago said the company is “aiming to invest P150 billion this year.”

“There’s a possibility to spend less if we can improve efficiencies, which would also bring down costs for consumers,” he added.

Mr. Tamano said DITO has already drawn from the initial facility “worth $500 million through the Bank of China.”

President Rodrigo R. Duterte formally awarded DITO’s CPCN in July last year. If DITO fails to meet its commitments, its CPCN will be taken back by the government.