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3rd telco gets permit, eyes pilot users before yearend

Updated: Jul 9, 2019

President Rodrigo R. Duterte presents the Certificate of Public Convenience and Necessity (CPCN) to Mislatel Consortium (DitoTelecommunity) chairman Dennis Uy on July 8, 2019. (Photo grabbed from Presidential Communications video)

The third telecommunications player in the country received its permit to operate from President Rodrigo R. Duterte on Monday night, July 8, 2019, and announced that it will conduct a pilot user program to test its 4G network towards the end of this year.

Mislatel (Mindanao Islamic Telephone Co., Inc.) Consortium - made up of Davao-based Udenna Corporation and its subsidiary Chelsea Logistics and Infrastructure Holdings Corporation, and China Telecommunications Corporation - also announced that it will be renamed Dito Telecommunity Corporation.

DitoTelecommunity will launch only 4G services and will not offer the legacy 2G and 3G systems.

The National Telecommunications Commission (NTC) issued a Certificate of Public Convenience and Necessity (CPCN), or permit to operate, to Mislatel after it complied with the required additional paid-in capital of P10 billion and performance bond of P25.7 billion.

The CPCN was awarded to consortium chairman Dennis Uy in an issuance ceremony at the President’s Hall in Malacañan Palace on July 8, 2019, about 18 months after Duterte ordered the NTC to ensure the entry of a third telecommunications company that will challenge the duopoly of PLDT/Smart Communications and Globe Telecom.

NTC Commissioner Gamaliel A. Cordoba said that with the CPCN, Mislatel or DitoTelecommunity would now be able to implement its commitments as the third telco under its five-year rollout plan.

The NTC granted the following frequency bands to Mislatel: 700 megahertz (MHz), 2100 MHz, 2000 MHz, 2.5 gigahertz (GHz), 3.3 GHz, and 3.5 GHz.

These will allow the consortium to extensively test its network towards the end of 2019 before commencing commercial operations in 2020.

“The entry of Mislatel in the market is expected to generate true and genuine competition among our telco players. Thus, the public stands to gain from better voice, text and internet service,” Cordoba said at the start of the ceremony.

He noted how relevant government agencies pitched in to ensure that the entry of a third telco would be smooth and how new laws were enacted and rules issued to facilitate the rollout of Mislatel's network and make it easy for the new player to attract customers.

The Department of Justice and the Office of the Solicitor General, for instance, defended the initiative when cases were filed in the courts to derail the process, Cordoba said.

Cordoba also cited, among others, the National Economic and Development Authority, Commission on Audit, Securities and Exchange Commission, Insurance Commission, Bangko Sentral ng Pilipinas and the Public Private Partnership (PPP) Center for their assistance.

He also pointed out that the NTC has issued the implementing rules and regulations for the Mobile Number Portability Act, or Republic Act 11202, in preparation for the entry of the third telco.

This law allows consumers to keep their mobile phone number for life, even if they switch network providers.

The NTC has mandated zero interconnection charge for voice calls and text messages.

NTC also issued rules requiring telcos to unlock mobile phones to allow consumers to easily switch from one network to another.

Earlier, the government also started implementing its common tower program to allow tower providers to build common telco towers that will fast track rollout of Mislatel's services while benefiting other industry players.

Dennis Uy, chairman and president of Udenna and chairman of Mislatel/DitoTelecommunity, said in a statement that the CPCN “is more than a compliance certification”.

“It is a clear signal that we are fully committed to providing world-class telecommunications in the country. This issuance will fast track our project rollouts as we plan to start commercial operations by 2020. This is just the beginning of establishing a telecommunity that will celebrate every Filipino’s life, existence and presence,” Uy said.

Duterte, in his speech after presenting the CPCN to Uy, said he will hold Mislatel to its commitment to improve internet speed in the country to 55 Mbps from the agonizingly slow 4.5 Mbps at present.

“The entry of Mislatel Consortium, assuming it complies with its commitment, is indeed a milestone in our efforts to provide fast, reliable, secure and more affordable telecommunication services to the public,” he said.

He challenged Mislatel: “Break the prevailing duopoly in the telecommunications industry and fulfill your commitment to provide better telco services to the people.”

Udenna and Chelsea own 35% and 25% of Mislatel, respectively, while China Telecom holds a 40% equity. The three companies had previously committed to invest P279 billion (roughly US$5.4 billion) in their partnership. (Ventures Cebu)

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