MANILA—The third telco seeking to penetrate the Philippine market is a Filipino company. Its name has been changed to further represent this fact.
Formerly Mislatel or the Mindanao Islamic Telephone Company, the third telco now bears the name Dito Telecommunity. Dito is the Tagalog word for “here.”
But the devil, as they say, is in the details. While half of the consortium is Filipino, the other half that will actually build, maintain, and monitor the entire Dito telecommunication network infrastructure in the Philippines is China Telecom, owned by the government of China.
This raises major concerns about cybersecurity and even national security, as some fear it exposes the Philippines’ communication lines to a foreign power with interests in Philippine affairs.
Dito Telecommunity is a consortium, the Filipino component of it being the Udenna Corporation and its subsidiary Chelsea Logistics.
Udenna is owned by CEO Dennis Uy, a Davao-based businessman who also owns the petrol company Phoenix Petroleum among other companies. Uy is also President Rodrigo Duterte’s adviser on sports and honorary consul to Kazakhstan.
According to the consortium, Udenna Corporation is in charge of Dito Telecommunity’s public affairs and is the consortium’s provider of “local knowledge” into the market.
“Current reports state that the country ranks 103rd out of the 139 countries in terms of mobile internet speed. The Philippines’ average mobile download speed of just 15mbps is far below the global average of 26mbps. To compare, the Philippines is even slower than Zimbabwe and Syria. In terms of fixed line internet, the Philippines is now 101st out of 179 countries. The Philippines’ average speed of 19mbps is much slower than the global average of 57mbps,” said Uy in a statement illustrating the dismal connectivity Filipinos have had to put up with for the longest time.
“Information and communication technology is essential in nation building. And yet our country lacks the structure that would ensure availability and accessibility to reliable telecommunication, including secure and fast internet access suitable to the needs and aspirations of the nation.”
With Duterte's blessing and the granting of a Certificate of Public Convenience and Necessity (CPCN) by the National Telecommunications Commission (NTC), Dito Telecommunity is now taking its first strides toward becoming a telecom game changer, promising to usher 84 percent of the Philippines into the 5G era in the next 5 years and disrupting the decades-long duopoly of telecom giants Globe and Smart.
What Dito Telecommunity offers seems to be a dream come true for the Philippines, said to be the top user of the internet worldwide. But as with all good things, there seems to be a catch – and Dito Telecommunity’s catch seems to be causing worry.
The other half of the Dito consortium – the partner that will do the actual physical installation and running of the Dito telecom network in the Philippines – is China Telecom, a state-owned telecommunications company operating under the government of the People’s Republic of China.
According to the consortium, China Telecom’s role in Dito is to “build and deploy network infrastructure, manage technical requirements, develop business plans for roll-out, and evaluate and adjust telco performance.”
All technical aspects of the telco are in China Telecom’s hands.
While on its website, China Telecom describes itself as “a main force for building a cyber power, digital China and smart society, a forerunner in supply-side reform in the fields of cloud computing, big data and artificial intelligence, and a provider of network infrastructure.” It also aims to achieve this “under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.”
Lawyer Adel Tamano, chief administrative officer of Dito Telecommunity, is quick to douse fear that letting a China-owned company penetrate the Philippines’ communication network effectively exposes the Philippines to unhampered espionage.
“We want to make it very clear that as a Filipino company, in terms of cybersecurity, in terms of national security, we will always make these paramount, and we will never allow any country to violate our national and cybersecurity,” Tamano said. He added, “One of the requirements for us to get a CPCN, which is our license as the 3rd telco, was to submit a cybersecurity plan, which was approved by the NTC.”
Tamano boasts of China Telecom’s capability to bring a much-needed improvement to the Philippines’ connectivity, it being one of the top 10 telecom players in the world, and the largest LTE-FDD 4G, optical broadband, IPTV, and fixed-line telephone operator in the world.
“We intend to invest nearly 6 billion dollars to the Philippines in 5 years because we are very earnest and very serious in our intention to truly disrupt and reform the telco sector," he said.
Some, however, wonder if the promise is worth the risk. There would be a lot of reasons to listen in on the Philippines, should anyone want to do so. There is tension between China and the Philippines in the West Philippine Sea. The Philippines’ longest ally – the United States – also happens to be China’s biggest rival for domination of the Pacific region.
Even the most powerful nations have fallen vulnerable to cybersecurity breaches, with the United States blatantly accusing China of perpetrating the more major attacks.
Tamano himself is circumspect in saying he cannot offer a 100 percent guarantee that Dito Telecommunity will not be used for espionage and cyberattacks.
“I don’t like to give 100 percent guarantees. I don’t think anyone can give 100 percent guarantee on anything, but for sure, we have the protocol and plan in place,” he said. For sure, this issue will be a constant thorn on the side of Dito, one they will have to constantly assure the public of.
IN THE DOOR
But it seems the leadership of the Armed Forces of the Philippines (AFP) is confident enough to keep these potential attacks in check.
On Sept. 11, the AFP signed a memorandum of agreement with Dito Telecommunity, allowing the new telco to put up its facilities and equipment inside AFP camps and other military communication sites across the Philippines.
“We have been partnering with Globe or Smart. This is the same partnership we are doing for Mislatel. It’s only fair na ibigay namin the same services,” said AFP Chief of Staff General Benjamin Madrigal.
Madrigal however clarifies that partnering with Dito does not mean the AFP is vouching for the telco’s claim that there will be no national security issues.
“All others, even Globe or Smart, more or less may threat, lahat 'yan ay vulnerable. We exercise security on all aspects,” said Madrigal.
“Part of our role is being security-conscious. [We have] programs and activities to ensure the security of our communications.”
A month ago, Defense Secretary Delfin Lorenzana already expressed apprehensions over the cropping up of Chinese-run online gaming sites near military camps, saying the same technology could very well be used alternatively for espionage.
The Department of National Defense (DND) will investigate the deal between the military and Dito Telecommunity amid concerns raised by lawmakers, Malacañang said Monday.
Lorenzana and National Security Adviser Hermogenes Esperon are "undertaking measures to respond to the concerns" over the deal, Presidential spokesman Salvador Panelo said.
Lorenzana said Monday he was on a trip when news of the deal broke out and would review it on Sept. 20 upon his return to Manila.
"Now I am aware of it and I will scrutinize it carefully before giving my approval. I’ll be back in Manila on the 20th," he said.