Fitch expects more telecom competition

Fitch Ratings Inc. said Thursday it expects more intense competition in the Philippine telecommunications industry with the entry of a new major player that could temper the growth of the duopoly PLDT Inc. and Globe Telecom Inc. 

The London-based credit ratings agency said with China Telecom’s consortium with Udenna Corp. emerging as the provisional third telco in the Philippines, the long-standing duopoly in the market would likely end.

The Mislatel consortium was declared as the provisional new major player and now qualifies for the next stage of screening to undergo further detailed evaluation by the National Telecommunications Commission. 

The two other consortia Philippine Telegraph and Telephone Corp. and Chavit Singson’s Sear Telecom were disqualified during the Nov. 7 bidding process. 

“The third telco is initially likely to compete aggressively on price as it strives to grab market share in an already highly saturated mobile market,” Fitch said. 

“We expect a large cash burn for the new entrant to roll out its network, and consequently, only a newcomer with deep pockets and technical expertise would be able to compete effectively against the incumbents,” it said.

Topics: Fitch Ratings Inc. , telecommunications industry , PLDT Inc. , Globe Telecom Inc. , Udenna Corp.
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