"Sovereignty issues aside, the government says Mislatel will be required to toe the line when it comes to cybersecurity."
The National Telecommunications Commission last Monday confirmed Mindanao Islamic Telephone Company (Mislatel) as the third telco provider in the country, to compete against firmly entrenched local companies Globe Telecom and Smart Communications.
Globe and Smart are said to have a “minimum” of 40 percent of the market share each, according to an NTC memorandum on the matter. Their customers have complained of slow internet speeds, dropped calls, hidden fees, and other service issues.
Soon after he took office, President Rodrigo Duterte invited the entry of other companies that could put Philippine telecommunications services on par with those of the best in the region.
Mislatel was adjudged to have complied with NTC bidding requirements, while rivals Sear Telecom of politician Chavit Singson and Philippine Telegraph and Telephone Corp. (PT&T) were disqualified for incomplete documents.
Mislatel’s win in the bidding is accompanied by controversy. The company is a consortium comprising China Telecommunications Corp. and Davao-based businessman Dennis Uy’s Udenna Corp. and Chelsea Logistics Holdings. Uy, a close friend of Duterte’s, is alleged to have contributed P35 million to Duterte’s presidential campaign.
Sources say, however, that Mislatel has fully complied with government requirements and promises to provide internet speeds of 27 mbps on its first year of operations and 55 mbps on its second year, on par with that of Singapore.
Should it fail to deliver, the company risks a loss of P24 billion in its investments.
Now that it has its confirmation order from the government, Mislatel has 90 days to submit to the NTC more documents and perform acts of compliance such as registering with the Securities and Exchange Commission.
The consortium also needs to “obtain approval from Philippine Competition Commission, National Economic and Development Authority, and National Security Adviser for background check on the consortium members. They will also have to submit their rollout plan,” said acting Information and Communications Technology Secretary Eliseo Rio.
Critics of the scheme see security issues with Mislatel. China Telecom is owned by the state and is the third-largest mobile provider in China and the ninth-biggest telecom company in the world.
China has established bases in the West Philippine Sea, declared unsubstantiated rights to certain Philippine marine resources, bullied fishermen in Philippine waters, and otherwise been flexing its muscles with regard to the Philippines.
Sovereignty issues aside, the government asserts that Mislatel will be required to toe the line when it comes to cybersecurity. The NTC Memorandum Circular on the matter says that part of the required roll-out plan is a detailed description showing that the new major telco player’s networks and facilities will not compromise national security and shall abide with the National Cybersecurity Plan formulated by the Department of Information and Communications Technology.
Under Republic Act No. 10844, the DICT is mandated to ensure and protect the rights and welfare of consumers and business users to privacy, security, and confidentiality in matters relating to ICT, in coordination with agencies concerned, the private sector, and relevant international bodies.
DICT also has the Cybercrime Investigation and Coordinating Center (CICC) as its attached agency. CICC was created upon the approval of Republic Act No. 10175 or the Cybercrime Prevention Act of 2012 to suppress real-time commission of cybercrime offenses, among others.
In any case, both Globe and Smart are already using Chinese telco technology. In January this year, Smart’s parent company PLDT, Inc. announced Smart’s partnership with China’s Huawei Technologies Co. Ltd.
The 15-month, $28-million (P1.4 billion) deal is for the improvement of Smart’s “online charging and electronic loading for prepaid subscribers,” said PLDT Group chief corporate services officer Ray Espinosa.
In November 2015, Globe signed a five-year partnership with Huawei for the planning and design of a mobile broadband network and the creation of a mobile innovation center.
Globe said the partnership will “enhance and expand the [telco’s] mobile network to elevate the state of Philippine Internet.” The mobile broadband network will use the “latest state of the art technology trends” while the mobile innovation center will house its “innovative products and solutions that would ensure Globe maintains its competitive edge.”
This matter is still developing and time will tell if Mislatel will indeed establish and operate its business and deliver on its pledges. Despite receiving government confirmation of its bid, Mislatel will not have a smooth path.
At a press conference last Nov. 14, citing national security and privacy concerns, House Minority Leader Danilo Suarez (Quezon) said “I will go to court and invoke national security to stop China Telecom from participating in the telecoms industry.”
Similarly, Ako Bikol party-list Rep. Alfredo Garbin said Mislatel will have to be disqualified for possible violation of the legislative franchise granted by Congress. “We have to determine who has controlling interest over the firm, how much was actually transferred of the interest. A congressional inquiry may be forthcoming,” he said.
Dr. Ortuoste, a writer and researcher, has a PhD in Communication. FB and Twitter: @DrJennyO