The third one

As promised by President Duterte during his campaign, the Department of Information and Communications Technology (DICT), under then Acting Secretary Eliseo Rio Jr., took a bold step when it decided that the country needed a third telco. The government thought that a country of 109 million spread over 7,641 islands needed more than two telecom providers. But for a third player to enter a well-established system was quite a gamble, a gamble few would be willing to take.

Maybe one of the big international groups would have, but our ill-conceived Constitution wouldn’t allow it. A demonstrable reason why the Constitution needs to be changed to remove, not modify as Congress currently suggests, the economic restrictions. So, it had to be 60:40. None of the well-known Filipino conglomerates seemed interested. It was left to a previously unknown business leader to step in. Dennis Uy, who founded and chairs Udenna Corp., decided to take the plunge.

But with no telecom experience or expertise, he needed a partner who did have. And that’s where the controversy set in. He chose a Chinese firmʍChina Telecom, the leader in global 5G technology. It also has the experience and the technology in the 4G VOLTE and 5G systems the world is shifting into and that the Philippines must, too. This has been questioned by some from a political standpoint. But from a technical one, it made good sense. Globe and Smart have recognized this and are introducing 5G, too.

There’s nothing wrong with going for a Chinese firm, but everything is wrong with China’s national policy on sharing collected data. According to the 2017 National Intelligence Law of China, “any organization or citizen shall support, assist and cooperate with the state intelligence work in accordance with the law.” There is also the 2014 Counter-Espionage Law, which says that “when the state security organ investigates and understands the situation of espionage and collects relevant evidence, the relevant organizations and individuals shall provide it truthfully and may not refuse.’’ For a telecom company, that’s particularly worrisome. China Telecom is government-owned, so that risk has to be answered. Uy’s company is fully Filipino-managed, and its security software is from the US, so maybe that protection is enough.

In this regard, controversy has already arisen as Dito Telecommunity (the name of the company) has obtained agreement from our military to allow cell sites to be built on military properties. Why that’s an issue I don’t understand. WiFi knows no geographical boundaries. Put a tower in a military base or put it outside, it makes no difference and does not increase the risk of hacking. Maybe someone could explain to me if there’s some sound technical reason why a cell site in a military base compromises the system.

While I’m on towers, here’s where a real problem is emerging. Globe and Smart have more than 20,000 towers dedicated to their own use, and are building more. Dito has built 2,360 towers so far. To accelerate construction, the DICT has introduced independent tower builders into the field who build towers on which everyone can install a system and pay a lease fee. The three telcos should also share use of the towers they now build. They shouldn’t build dedicated towers anymore. That way, we can get fuller coverage quicker. And they should share the use of existing towers, if they can bear the load—for a fee, of course. As I’ve raised in a previous column, we are 50,000 towers short of ideal.

But back to Dito. It has passed its first technical audit. The next milestone will be a more rigorously undertaken audit by the National Telecommunications Commission (NTC). Despite being on track with 36 cities already covered, Dito has a long way to go yet and will need to be very imaginative in its offering to attract people away from the established two telcos. It will need to obtain at least 10 million customers early on if it’s to establish long-term viability.

There is also one area that I’ve not seen discussed much: fiber optics. All are moving into this faster system. Back in December, the NTC reported that PLDT had laid out 422,290 kilometers of fiber optic, followed by Globe with 66,518 kms and Dito with 13,152 kms. Globe and Smart are also expanding their fiber optic footprint in key places. As an interesting aside, I was working for Corning Glass Works (a glass company) when it invented fiber optics cable. I still have a piece of the early cable.

The bottom line: If all goes well, with fiercer competition we’ll have a much-improved, more comprehensive-coverage telephone system five years or so from now. But this requires the willing cooperation of all. A cellphone can now be considered a public service. It’s no longer an option, but an essential personal service we all must have. Our cellphone is our constant partner; living life is inconceivable without it. So, ensuring that the three telcos provide the best service possible must be the ultimate goal of the DICT.

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