Dito Telecommunity Corp., the “third telco,” is understandably hard at work to secure a fresh 25-year legislative franchise to operate a telecommunications network, as its current one via Mindanao Islamic Telephone Co. (Mislatel) will expire in 2023.
The company co-owned by Udenna Corp. and state-run China Telecom knows the damaging consequences of a failure to secure a franchise: Investors, suppliers, creditors, and even potential employees would be wary of supporting the venture until it gets a clear signal that Congress would indeed grant it a fresh mandate.
But valid concerns over Dito’s ability to execute on its plans, which were supposed to enable it to break the duopoly of telecommunications giants Philippine Long Distance Telephone Co. and Globe Telecom Inc. and accelerate the country’s notoriously slow internet speed, are holding up quick approval by the Senate.
“Wala pa naman silang napapatunayan, bakit naman namin sila bibigyan ng prangkisa agad-agad?” declared Sen. Grace Poe, chair of the Senate committee on public services that is hearing Dito’s application for a new franchise.
“If we shall give the privilege of a franchise to a company that is promising to provide better service, we must hold it accountable to that, particularly now that connectivity is a necessity,” Poe added, citing Dito’s expressed commitment to serve 7,435 barangays on its first year of application with a minimum speed of 27 megabits per second, above the average of 25.07 mbps as of July 2020.
Dito, formerly Mislatel, won the bidding to be the country’s third telco in 2018. Among its commitments were to provide a minimum average broadband speed of 27 mbps on its first year, to be accelerated to 55 mbps by its fifth year, when it should have covered 84 percent of the population.
Dito failed to fulfill its network rollout schedule, citing movement restrictions caused by the COVID-19 pandemic. It was then granted an extension to fulfill its first-year commitments from July this year to January next year, at which time it should demonstrate—through a third-party technical evaluation—that it has provided a minimum standard of 27 mbps speed for internet connection, and should cover 37 percent of the population.
The delay in the physical rollout of telco infrastructure is one thing; of greater nagging concern among observers is the national security risk posed by Dito’s corporate setup arising from the 40-percent stake in it by a state-run Chinese company. Under Chinese law, Chinese companies are required to report to the Beijing government any information it asks of them.
Compounding such fears is the controversial agreement signed by Dito and the Department of National Defense that officially allows the telco partly owned by the Chinese government to set up installations inside military camps.
The Duterte administration had brushed off objections to the deal, saying the military has enough safeguards against possible spying and infiltration that may be carried out through the China-backed towers and IT system to be installed inside the military camps. But National Security Adviser Hermogenes Esperon recently admitted to an alarming reality: The government does not have a robust “operations center to defend against cyberattacks on a national level.”
So “how can the government assure us they’ve given a fair assessment of the safety to our sovereignty if we don’t even have a cybersecurity group that does the assessment?” demanded Poe.
Dito has consistently maintained that the presence of ChinaTel does not pose a threat and that the company is still run by Filipinos, being 60-percent owned by Udenna. Udenna is controlled by businessman Dennis Uy, who is closely associated with President Duterte and was one of his biggest campaign donors.
In an apparent attempt to dispel fears, Dito has embarked on a hiring spree of ex-military men. The company announced recently that it had hired retired colonel Roleen del Prado to head its cybersecurity unit, a role he also played in the AFP.
Dito chief technology officer Rodolfo Santiago, himself a retired general, said that a “minimum” of nine ex-soldiers are helping Dito beef up security.
For Dito chief administrative officer Adel Tamano, that should be assurance enough to the public: “These are people who had been sworn to protect our country, and for me, why should there even be a shadow of doubt that we will let our national security be compromised?”
It would take more than the presence of former military men in Dito, however (whose salaries, it must be noted, are now partly paid by Beijing), to remove doubts about the third telco and the inroads it will make into the military IT system, and by extension the country’s national security infrastructure. In deliberating on Dito’s franchise renewal, the Senate must sift reality from rhetoric thoroughly and tenaciously, and stand by the country’s best interests at all times.