An Asia-Pacific consulting firm based in Australia released last month a telecommunications study which raised serious concerns on national security and on the selection and impending operation of Dito Telecommunity-China Telecom as the country’s third telco player.
The consulting firm, Creator Tech, undertook the study and titled its report “A Study Into The Proposed New Telecommunications Operator In The Philippines: Critical Success Factors and Likely Risks.”
Creator Tech said in its report, authored by Steve Mackay, that the selection process upon which Dito was awarded the franchise as the third telco appeared flawed.
The report added that China Telecom’s partnership with a local telco player was based on the imprimatur of President Rodrigo Duterte who, in 2017, reportedly requested China’s Prime Minister Li Keqiang for a Chinese company to run the country’s third telecom operator.
“It is difficult not to draw the conclusion that China Telecom was pre-destined to win the license for the 3rd telco in the Philippines,” read part of Creator Tech’s report.
“Since there were apparent irregularities in the license process, which could justify withdrawing, a future administration may overturn the decision to award the license,” said the report, citing a raft of natural and man-made hurdles confronting Dito-China Telecom’s partnership.
On its conclusions, the report reiterated that a future Philippine administration “would have multiple grounds on which to revisit or withdraw the license. This represents a risk to the venture.”
Creator Tech’s report also made mention of China Telecom’s background as a state-controlled company mentioned by the United States Department of Defense as having ties to the Chinese military, along with 19 other state-run business firms.
“China Telecom reports to the Central People’s Government in China. This partner of Dito, which describes itself as ‘a main force for building a cyber power,’ is China’s preferred third mobile operator put forward by China’s leaders upon the request of President Duterte. This raises serious questions on cyber security, citizens’ privacy, and national interests. These will have serious repercussions on multiple fronts,” read the summary of Creator Tech’s study.
It also mentioned an analysis of the third telco’s company strategy, which will need the support and understanding of the board of directors.
“Since China Telecom accounts for 40% of the ownership, then it will have an input on the company’s strategy and given China Telecom’s ownership by the Chinese government, they may have other considerations than business profitability,” said the report.
