Service reliability is key for Mislatel to break Philippine telco duopoly

A GLOBAL NONPROFIT organization dedicated to studying the internet said the Mislatel Consortium, which is preparing to become the Philippines’ third telecommunications provider, will have to prove itself in terms of service reliability before it can grab market share from the current leaders.
Rajnesh Singh, the regional director for Asia Pacific of Internet Society, said he expects the third telco player to make a “big difference” in improving the country’s telecommunications landscape.
“I think the demand will be there. So when the third telco really serves their products and services, I’m sure there’ll be an uptake. People will switch for the sake of switching… But I think right now, pricing is not the concern in the Philippines. It’s reliability,” he said in an interview on Feb. 21.
“Obviously Globe (Telecom, Inc.) and Smart (Communications, Inc.) are not going to sit back and let them do that. What that does is bring competition, which is what we actually want to see,” he added.
Last November, the government awarded the third telco slot to the Mislatel Consortium, formed by China Telecommunications Corp. and Dennis A. Uy’s companies, Udenna Corp. and Chelsea Logistics Holdings Corp.
The consortium committed to deliver an average minimum broadband speed of 27 Megabits per second (Mbps) in its first year of operations, and 55 Mbps in the succeeding years. This elevates the state of the internet in the country, which according to a recent OpenSignal report, is only reaching an average of 9.4 Mbps.
“Having a duopoly, they’re both comfortable with each other and everything is fine, but nothing works… I do expect that the third telco will make a big difference, and that’s why something like this is even far more important,” Mr. Singh said.
“If they can position themselves as a more reliable provider, which means probably more cell towers and better connectivity…, they could very easily position themselves (in the market),” he added.
Mr. Singh also noted that as a new player, Mislatel may take interest in the government’s recently launched National ICT Ecosystem Framework (NICTEF), which outlines the country’s ICT agenda in the next five years.
“If I were the third telco, I would be looking at this document and say, ‘Okay, I know I have to launch soon. I have a business plan, but how do I structure that business plan to ensure I can reap the benefits of what the government is going to push with the NICTEF?’ I would look at it,” Mr. Singh said.
The NICTEF, which is the successor to the Philippine Digital Strategy Initiative 2011-2016, identifies trends in the ICT industry and strategic thrusts and indicators that the government will be watching out for.
Mislatel is currently waiting for the National Telecommunications Commission (NTC) to finish the review of its post-qualification documents, including its business and rollout plans.
Last week, the Department of Information and Communications Technology (DICT) said it is waiting for Congress to agree on a resolution allowing the transfer of Mislatel’s ownership to the consortium before it may award the group its permit to operate and its frequency bands. — Denise A. Valdez