Mislatel, now Dito Telecommunity, gets permit to operate as 3rd telco

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President Rodrigo Duterte handed over the Certificate of Public Convenience and Necessity to Mislatel, now Dito Telecommunity Corporation, led by businessman Dennis Uy.

Metro Manila (CNN Philippines, July 8) — President Rodrigo Duterte on Monday challenged Mindanao Islamic Telephone Co. (Mislatel) to break the existing duopoly of Smart Telecommunications and Globe Telecoms.

He posed this dare as he formally granted a Certificate of Public Convenience and Necessity (CPCN) that paves the way for Mislatel's operation as the country's third major telecommunication player.

"Let me take this opportunity to pose this challenge to Mislatel [Consortium]: Break the prevailing duopoly in the telecommunications industry and fulfill your commitment to provide better telco services to our people," he said during the issuance ceremony.

Mislatel, which will be renamed as DITO Telecommunity Corporation, is a consortium of Davao businessman Dennis Uy's Udenna Corporation and Chelsea Logistics Company, Inc. and Chinese state-owned China Telecommunications Corporation.

Duterte said that should Mislatel stay true to its promises, this could spell the start of a reliable, secure, and more affordable telco services.

The CPCN, on top of the legislative franchise acquired from Congress, grants the firm license to operate as a telecoms service provider. Mislatel had posted a ₱25.7 billion performance bond for its commitments under its new status. The company is now expected to go head-to-head with Smart Telecommunications and Globe Telecoms in a highly competitive industry.

DICT Undersecretary Eliseo Rio, in a phone interview, said Mislatel will start rolling out the infrastructure to widen their services after receiving its CPCN.

Rio said Mislatel is expected to get its first subscribers from populated areas like Metro Manila, Cebu, and Davao as early as November this year.

"Siyempre maguumpisa 'yan na pilot-pilot [testing] muna 'yan. Then they readjust kung may problema pa ang network nila. They will only go to a commercial operation pag wala nang problem sa network nila. Sa timeline nila that is 2020," Rio said.

[Translation: Of course they would start with pilot-pilot testing first. Then they readjust if there are still problems with the network. They will only go to a commercial operation if they don't encounter problems any longer. In their timeline, that is 2020.]

Rio explained the DICT decided to grant Mislatel’s license to operate after it complied with the requirements the government set, including the posting of the performance bond. The government will forfeit the bond if Mislatel fails to deliver on its commitments as stated in the Terms of Reference, he added.

Mislatel had commited to provide internet service with a speed of 27 megabits per second (Mbps) to 37% of the population on its first year of operation. A SpeedTest 2018 report had pegged the current internet speed at 15.06 Mbps, which is below the global average of 26.12 Mbps.

"If they could not accomplish it in the first year, they are given a six-month grace period to accomplish whatever deficiencies they have. If after six months wala pa rin [there is still no development], that’s the time we confiscate the performance bond. Not only that, they will lose their CPCN, their license, and frequencies," Rio explained.

The Philippines has an average mobile internet download speed of 7 Mbps and an average upload speed of 2.2 Mbps, international analytics company Opensignal said in a report released last May. The country has the 16th slowest download speed among 87 nations covered by the study, with the global average at 17.6 Mbps.

In April, Udenna signed a $5.4-billion investment deal with China Telecom to fund Mislatel's expansion in the Philippines.

CNN Philippines' Correspondent Joyce Ilas contributed to this report.