Senate panel defers China-backed Dito Telecommunity’s franchise renewal
MANILA, Philippines — With only three months to go before its targeted commercial launch in March next year, the China-backed Dito Telecommunity has yet to secure another 25-year franchise, which is set to expire in 2023.
This after the Senate public services committee on Monday deferred the approval of its franchise renewal to make way for further evaluation that the company indeed met its commitment to the government.
Dito earlier committed to cover 37 percent of the population in 2020 and provide an average speed of 27 megabits per second (mbps). By 2024, Dito should have an 84-percent coverage and offer a minimum average internet speed of 55 mbps.
The company, which holds a congressional franchise via Mindanao Islamic Telephone Co. granted in 1998, was selected as the country’s third telecommunications player in 2018.
Asked by Senate Majority Leader Juan Miguel Zubiri during the hearing, Dito chief administrative officer Atty. Adel Tamano admitted that it would be difficult for the company to fully rollout in March 2021 if the franchise renewal is not approved by then.
“You have to let us know because that will help us in the speed of which we will approve your franchise, it would be difficult for you to fully roll out in March,” Zubiri said.
Zubiri said that banks would probably make the approved franchise renewal a prerequisite for the approval of loans, which can be used for capital expenditure.
But Senator Grace Poe, chair of the Senate public services committee, said Dito should anticipate the cost of its rollout.
“When Dito applied for this franchise and made all these commitments, they should have had the forecast of what they were going to spend already,” Poe said.
“They should not have anticipated that they will get a renewal of their franchise unless they’re able to produce the commitments that they were able to make without additional funding based on the 25 years that they are expecting to get,” she added.
She said her committee wants to avoid instances wherein applicants anticipate a renewal of their franchise and halt its roll-out until it receives a new franchise.
“I don’t want our committee to be a hostage of that. So, the basis, really, of granting the franchise—because we’ll be remised also in our responsibility—is that they are able to provide at least the initial commitment that they gave, which is 27 mbps (megabits per second), 37 percent coverage, etc,” Poe said.
“If they’re able to commit that and then, if they’re able to commit that, to that then we will be able to determine if we will give them the additional 25 years,” she added.
Zubiri agreed with Poe that Dito should be able to deliver on its commitments but pointed out that there applicants with pending telco franchise applications which are currently considered as “shell companies.”
“Once they get their franchise that’s the only time that they will increase their capital base, file loan applications and then they start rolling out,” he said.
Poe then said: “We’re just here to safeguard the commitments made to the government.”
Senator Risa Hontiveros expressed appreciation to Poe’s decision to invest more time to deliberate on Dito’s franchise renewal application, noting that the company is in a “unique” position.
“It’s quite a unique franchise, a unique company in this sector and in any other perhaps because of the national security issues that have been raised,” Hontiveros said.
“We’re looking at a time frame of a quarter of a century during which time, ang dami pa nating ire-resolve with China here in our region,” she added.
