The writing on the wall

THE entry of a third telecoms player into the country was bound to happen sooner or later. With the Philippines purportedly having not only the slowest average broadband speeds in the world but also one of the most expensive, the two major players in the telecoms industry should have seen the writing on the wall.

A day does not pass when we do not encounter a friend or colleague complaining about slow download times or lost Internet connection on their mobile phones. Even those using the recently been grumbling about frequent downtimes.

While it is true there are at least 14 internet service providers in the country, which provide internet services to homes and businesses nationwide, it is also an undeniable fact that most of our countrymen—from the lowly farmer in the hinterlands to the business executive in Fort Bonifacio—access the internet through their mobile devices. And this means going through the cellular data network of the country’s telecom duopoly: PLDT- Smart and Globe. This explains why fast and reliable internet connection—or lack of it—is such a big deal for many Filipinos.

The public clamor for faster reached the ears of President Rodrigo Duterte that last November, the Palace announced that China Telecom—the biggest third- largest mobile services provider in China—would come in as the third major telco player in the Philippines.

Certainly, after the speedy passage of a new tax reform law, no one can deny that what President Duterte wants, he gets. It is now up to the Department of Information and Communications Technology (DICT) and the National Telecommunications Commission ( NTC) to deliver on the president’s orders that China Telecom should be “up and about” by the

It’s already a week into the new Eliseo Rio, Jr. and NTC Commissioner Gamaliel Cordoba should how China Telecom can maneuver through the constitutional restrictions on foreign ownership. This is because under Article XII, Section 11 of the Constitution, only corporations sixty percent of whose capital is owned by Filipinos, are authorized to operate public utilities like a telecom company.

The way the Duterte administration envisions it, the stateowned Chinese telco will take a 40 percent share of the new company while a consortium of Filipino companies will own the remainder.

What is certain though is that President Duterte is dead set on having a third major player in the telecoms sector, even warning the judiciary that they should not impede the entry of China Telecom. Clearly aware of the propensity of some courts to stonewall big-ticket projects, Duterte declared: “I do not want the courts to interfere and prolong this process. Do not issue any TROs or injunctions. This is a matter of national inter

- tion for President Duterte’s decision to allow China Telecom into the country is that “we need desperately to have better telecoms in this country.” Presidential spokesman Harry Roque has argued that the telecom duopoly of PLDTSmart and Globe had investments from foreign players as well so China Telecom’s entry would not necessarily be groundbreaking.

There are, of course, the naysayers who claim that the Chinese crucial internet and telecoms system could put national security at risk. But as the president’s national security adviser Hermogenes Esperon noted, the country’s two major telcos also have foreign shareholders from Japan and Singapore. Esperon adds that both PLDT-Smart and Globe already count Chinese-owned companies Huawei and ZTE as major telecoms equipment suppliers.

Besides, getting telecommunications technology, infrastructure and network from so-called “allied” countries do not guarantee cybersecurity. Even the US, which uses telecom and internet gear exclusively from Sweden’s Ericsson, France’s Alcatel-Lucent, and Finland’s Nokia Siemens, have not been immune to cyber espionage.

For instance, Russian- linked hackers have broken into energy companies supplying electricity to America’s power grid, giving them the ability to cause major blackouts in the US. Russian hackers were also reportedly behind the attempt to pry open the email inboxes belonging to those in the top echelons of the United States’ diplomatic and security services, including workers for defense contractors such as Boeing, Raytheon

Consumer advocates also point out that most equipment supplied by Ericsson, Alcatel-Lucent, and Nokia Siemens to the big American telcos like AT& T, Verizon, Sprint etc., are all manufactured in China. So, what’s to stop Chinese spies from tampering with those operations?

such a security threat, why did the US allow the company to offer data networking, internet and mobile services in their country? Perhaps not many Filipinos are aware of it but China Telecom already operates in the US through its largest international subsidiary— China Telecom Americas—headquartered in Virginia, a stone’s throw from America’s political heartland, Washington, D.C.

From my perspective, the poten of a third telco player far outweigh any cyber security issue. What is important is that despite the backing of the Duterte administration, the Chinese telcom giant not be given any undue advantage over the existing local telco players. In other words, other than removing the bureaucratic red tape for China Telecom’ entry into the Philippine market—and rationalizing the assignment of frequencies among mobile service providers— the existing telco players like PLDT- Smart and Globe should also enjoy the same preferences or privileges given to the Chinese telco.

Barriers to the modernization or expansion of the country’s ICT infrastructure (i.e. cell tow cables) frequently complained of by PLDT- Smart and Globe, such as excessive bureaucratic red tape and burdensome permit issues, especially at the local government level, should also be eliminated. This is to ensure allow all telcos (China Telecom included) to compete freely and fairly with one another.