Duterte threatens to shut, expropriate telcos if no improvement by December

Jessica Fenol, ABS-CBN News

Posted at Jul 27 2020 05:57 PM | Updated as of Jul 27 2020 11:21 PM

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MANILA (UPDATE) -- President Rodrigo Duterte said Monday he would "close" all telecommunication providers and "expropriate" if services won't improve by December. 

In his 5th State of the Nation Address (SONA), Duterte urged the duopoly of PLDT and Globe Telecom to improve their services or face "closure" or "expropriation."

"Kindly improve the services before December. I want to call Jesus Christ in Bethlehem, better have that line cleared...If you are not ready to improve, I might just as well close all of you and we revert back to the line telephone at kukunin ko yan (I will take that) expropriate ko sa gobyerno (to the government), Duterte said. 

"Kung ganon din naman ang ibigay niyo sa amin (If that's what you're going to give us), we are a republic sovereign country, bear that in mind because the patience of the Filipino people is reaching its limit and I will be the one to articulate the anger of the Filipino people," he added.

Duterte said the telco giants should find ways to infuse more capital if money is the problem. 

The President vowed to spend his last 2 years in office improving the telecommunication services in the country with the help of Congress.

"Kung wala kayong pera umalis kayo rito (If you don't have money, you can leave). You give us half-cooked transactions, lousy service tapos ang tao nagbabayad (then the people will pay). Tell us now if you cannot improve on it…I have 2 years, the next two years will be spent improving the telecommunications in this country without you," Duterte said.

"I will find a way. I will talk to Congress and find a way how to do it," he added.

Globe Telecom is a unit of Ayala Corp while Manny Pangilinan serves as the Chairman of PLDT Inc. 

Third telecommunications player DITO Telecommunity, aiming to challenge the duopoly of Globe and PLDT, has enjoyed Duterte's support when he said there was "no corruption" in the consortium.

DITO is composed of Dennis Uy's Udenna Corp and Chelsea Logistics with China Telecom. 

Uy is a long-time ally of the President while Beijing has had friendly bilateral relations with the Philippines under Duterte's administration. 

DITO committed to provide up to 27 mpbs or "near-Singapore" internet speed in its first year. 

Out of its first year commitment of 1,300 towers, 300 are now "live" while 500 have been erected, chief technology officer Rodolfo Santiago earlier said. The 300 online towers cover 9 percent of the population, below the 37 percent commitment for the first year.

Despite the delay in the technical audit, DITO said it has completed its first call milestone and that it was "on track" to launch commercially in 2021.

Fitch Solutions in its July report, revised downwards the Philippines' Telecoms Industry Risk score, as it noted the "regulator’s apparent ability to be influenced by the government continues to be a key impediment to foreign investor sentiment, and has also made the telecoms landscape difficult for both new entrants and existing players." 

The slow formulation of a tower sharing policy, which was released in a draft version in May 2020, "highlights the slow pace of instituting reforms, and has partially contributed to the delay of new telecoms entrant, Dito Telecommunity, in rolling out its commercial services," it added.

The DICT has earlier released the approved guidelines for common tower building. 

The threat on telcos after the shutdown of ABS-CBN's broadcast operations was an "attack on regulated sectors," said Infrawatch PH convenor Terry Ridon. 

"The President himself is leading the attack on regulated sectors on the flimsiest reasons. This does not in anyway advance the public interest: it impinges economic growth, undermines confidence in the economy and violates the sanctity of contracts. Improving telco services without government support will not happen by December 2020,” Ridon said in a statement.

Expediting the process to secure permits for telco towers will speed up infrastructure and improve services, Ridon said adding that the December deadline was "unrealistic and would open the floodgates of illicit transactions."

”If President Rodrigo Duterte is serious about improving telco services, he should order national agencies and local governments to expedite the approval of at least 25 regulatory permits for the building of a single cell tower...The current backlog stands at 30,000 cell towers. Doing the math, it does not take a rocket scientist to understand that the target will not be reached by December 2020,” he said.