Since the start of his term, the President has been vocal about his dissatisfaction with the services of the country’s top telecommunications providers. Talks about a third player entering the Philippine telco industry have been heard since then.
In late 2015, many Filipinos were excited about the news of Telstra, Australia’s biggest telco company, entering the Philippine telco market to challenge the duopoly of PLDT-Smart and Globe. San Miguel Corporation and Telstra terminated their negotiations on their supposed joint telecommunication venture in the Philippines, reportedly because the parties were unable to agree on commercial terms.
Before 2017 came to a close, it was reported that China Telecom, the biggest wired Internet service provider in China and fully owned by the Chinese government, will be the third telco player in the Philippines. In fact, President Duterte ordered the Department of Information and Communications Technology and the National Telecommunications Commission to ensure that the third player is up and running by first quarter of this year.
While I agree that telecommunications and connectivity are serious problems in our country, we must wonder, is China Telecom a Trojan horse?
The public should be aware that 40 percent of the National Grid Corporation of the Philippines, that is our country’s power distributor is China-owned. Last year, I was vocal about my disapproval of the 40-percent ownership. Are we now handing over telecommunications and Internet connectivity to China, as well? If we allow the neighboring country, it can switch off our telecom?
The telecommunications industry is a nationalized industry. It is imbued with public interest and public safety. Is it really prudent to allow foreign entities to have access to both sectors?
Giving China access to the Philippine communications infrastructure is a serious threat to national security. In fact, even the United States banned Huawei and ZTE from bidding on government contracts, after their House Intelligence Committee reported that these were a national security threat due to possible espionage. Currently, only the consumer market (smartphones) is open for Huawei.
The idea of welcoming a third player in the Philippine telco industry is basically coming from the demand for a better telecommunications services. We have two main players here that have been serving over a hundred million subscribers.
If we want the quality of telco services to improve, we should demand the Philippine telco companies to invest on improving their infrastructure. The Congress recently renewed the franchises of Globe and Smart, in the condition that they would improve their services at no additional cost to the consumers; hence, we are looking forward to the fulfilment of this promise.
It is an attractive proposition—the infusion of fresh capital, and availability of new technology in an industry that is a continuing disappointment to its many subscribers. However, this to me comes at too high a price. I suggest that the administration do not rush such a decision. We need to be vigilant about the national security implications here. Remember, 40 percent of the company that distributes power is China owned. What’s next?