DICT: Barring Chinese-backed Dito from military camps against competition laws

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Metro Manila (CNN Philippines, September 17) — The Department of Information and Communications Technology (DICT) said prohibiting Chinese-backed Dito Telecommunity from erecting communications facilities in military camps would be a violation of competition laws.

“Not allowing Dito to co-locate inside military camps when Globe and Smart, both also using Chinese-made equipment are allowed, would be against our [competition] laws,” DICT Undersecretary Eliseo Rio said Tuesday in a statement.

Rio also said Dito’s deal with the Armed Forces of the Philippines (AFP), which would allow it to erect communications facilities in military camps, is no different from the Army’s previous deals with Globe and Smart. The two telco giants tapped military camps as sites of their communications equipment to protect it from attacks by communist rebels.

“No classified information has been compromised thus far in around 126 military facilities with Globe and Smart cellsites. Nor there have been operations of an AFP unit undermined by such a set up,” Rio said.

He added that these co-location agreements improve military operations and save millions of pesos in telecommunication services and equipment costs.

Rio said Dito’s agreement with the military is even stricter as it specifically states that national security will never be compromised by their network.

The memorandum of agreement signed last week states that Dito “guarantees that the devices, equipment, and/or structures installed at the site provided by the AFP shall not be used to obtain classified information.”

“The country’s national interests, including cybersecurity interests, are protected and secure from electronic threats and espionage,” said Rio, who once served as the commanding general of the AFP Communication, Electronics and Information System Service.

Rio issued the statement amid security concerns hounding the Army’s deal with Dito, formerly known as Mindanao Islamic Telephone Co., which is controlled by a consortium that includes Chinese government-owned China Telecom.

Opposition Senator Francis “Kiko” Pangilinan has pointed out that two Chinese laws mandate Chinese companies to “cooperate in gathering of intelligence information by the state.”

But Dito said Tuesday in a statement shared to reporters by the AFP that while this may be legal in China, it is prohibited in the Philippines.

Dito also allayed concerns over its ownership, saying China Telecom’s 40 percent stake in it is similar to the shares of Singapore Telecommunications Limited (Singtel) in Globe and the shares of Japanese telco Nippon Telegraph and Telephone (NTT) in Smart. Singtel and NTT are partially owned by the Singaporean and Japanese governments, respectively.

Dito also said it “will always protect the national and cybersecurity interests of the Philippines.”

The third telco’s deal with the military is still up for review and approval by Defense Secretary Delfin Lorenzana, who was initially left in the dark about it.

Dito got a permit to operate as third telco in July. The government hopes that the entry of new players in the industry would break up the dominance of Globe and Smart and improve services.

DICT Secretary Gringo Honasan said Dito's entry will increase internet speed in the country from 3.5 megabytes per second (mbps) to 15 to 20 mbps in the first quarter of 2020.

Dito said it plans to cover 84 percent of the country with 5G network technology in five years.

Defense officials have earlier raised alarm about the presence of Philippine offshore gaming operators — which largely employ Chinese nationals — near military camps, calling them a potential security concern.

CNN Philippines’ Xave Gregorio and David Santos contributed to this report.