China Telecom Poised to Become 3rd Telecoms Player in PH

Joshua Claude December 11, 2017
China Telecom Poised to Become 3rd Telecoms Player in PH

China Telecommunications Corp. is poised to invest in the Philippines and become the latter country’s third telecoms player as the government looks to stir up competition in an effort to boost notoriously poor services.

The state-run Chinese telecom could become the Philippines’ third telecoms player, officials of the Southeast Asian nation said on Sunday, after President Rodrigo Duterte invited China to enter the Southeast Asian country and challenge local phone carriers PLDT Inc. and Globe Telecom Inc.

The Chinese government, which controls its phone carriers, picked China Telecom to be the one entering the Philippines, Communications Secretary Martin Andanar said Sunday, citing information from a cabinet meeting last week. China Telecom will have to look for a local partner with an existing franchise and a significant presence in the Philippines, Andanar said.

Philippines President Rodrigo Duterte last month offered China the “privilege” of challenging a long-lasting duopoly that has frustrated consumers because of slow and intermittent internet and mobile phone services.

“The Chinese government selected China Telecom to invest in the Philippines upon invitation by President Duterte during the bilateral meeting last Nov. 16,” said Eliseo Rio, secretary of the Department of Information and Communications Technology.

Chinese companies could not operate alone in the Philippines and would need to partner with a local company as the government is now looking at who will partner with China Telecom on a 60-40 basis, Rio said.

The Philippine constitution’s 40 percent cap on foreign ownership of domestic telecoms companies has kept interest from multinationals at bay in the market of more than 100 million people. Andanar said the state-owned Chinese company should partner with a reputable Philippines company with an existing telecoms franchise.

“The government is fast-tracking this because consumers are getting annoyed with dropped calls and slow internet connections,” Andanar said.

Also seeking to be a major player is Philippine Telegraph & Telephone Corp, which had said it was talking with China Telecom and Datang Telecom about strategic partnerships to challenge the nation’s dominant duo of PLDT Inc and Globe Telecom Inc.

Shares of PLDT and Globe fell as Duterte, who has sought warmer ties with China amid a South China Sea territorial dispute, pushes through his pledges to open the phone market. For China Telecom, entering the Philippines would help the company expand into one of the fastest-growing economies in Asia.

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Joshua Claude


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