Third telco selection signals Philippine government’s ‘bias’ toward China — Fitch
MANILA, Philippines — The selection of Mislatel — a consortium of a Filipino tycoon and state-controlled China Telecom—as the Philippines’ new major service provider highlights Beijing’s growing political clout in the country, a think tank said.
President Rodrigo Duterte last year invited China to be the Philippines' third telecom provider that will transform the country's troubled telecommunications sector that has long been dominated by PLDT and Globe.
Davao-based tycoon Dennis Uy, an old friend of Duterte, teamed up with China Telecom to form the Mislatel Group — which the Philippine government has formally declared as the country’s third telco carrier after two rival bids were rejected and foreign players backed out.
“The selection of China Telecom, which follows the almost immediate disqualification of the two other bidders, hints at the government’s bias towards Chinese involvement in the telecoms sector, and is a clear sign of Duterte’s warming posture towards China,” Fitch Solutions said in a commentary.
Despite Duterte's warm relations with the Asian power, Filipinos remain suspicious of it as the two countries spar over the resource-rich South China Sea.
Some Filipino lawmakers previously warned that giving China Telecom access to Philippine communications infrastructure could be a "Trojan horse" and “a serious threat to national security.”
In a bid to douse security concerns given China’s telco expertise and sophisticated technology, Mislatel has said that under the group’s roll-out plan, data protection and national security are its “top priority.”
“’That said, we believe that the selection of China Telecom would have been, from a technical perspective, the most feasible one as the state-owned telco has the experience, scale and financial capability needed to disrupt the Philippines telecoms sector that is otherwise lacking at the other contenders,” the Fitch unit said.
“China Telecom’s influence in the consortium cannot be undermined, as it is the only player with the technical expertise to make any credible attempt at threatening the existing duopoly,” it added.
“We expect the state-owned telco to utilize, to a large extent, compatriot suppliers and manpower to set up its network; Chinese state-owned entities have an excellent track record in this respect.” — Ian Nicolas Cigaral
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