That third telco is a long ways off

When the government announced that they were planning to tap the China Telecom as the third telco player, the public was excited about the prospect of finally having an alternative to the current duopoly of PLDT and Globe. To further underline the urgency of the need for a third telco, President Duterte ordered both the National Telecommunications Commission (NTC) and the Department of Information and Communications Technology (DICT) to make sure that the third telco player would be up and about by the first quarter of 2018.

But we’re now in the second quarter of 2018 and that third telco player is yet to be named. We’ve had a lot of interesting prospects put feelers out sure, like PT&T, China Telecom, and ZTE. But as of today, there’s still no solid third telco player as of yet, despite President Duterte’s wishes that a new one be “up and running” by this point in time.

In fact, you can expect the announcement of the third telco after the president’s State of the Nation Address (SONA) in July, as the DICT is still trying to finalize the terms of reference for the 3rd telco auction.

Truth be told, there are very few local companies that can come up for the capital to establish a third telco player. Finance Secretary Carlos Dominguez III said that whatever company that gets chosen will need at least Php 200 billion to start up and compete with both Globe and PLDT.

Remember, under the current rules of our constitution, no foreign entity can own more than 40% of any local business, especially when it deals with utilities like communication. Whatever foreign company steps up to the plate, a local company will have fork up the majority of the funds to start building the infrastructure. And that Php 200 billion estimate will just be the start, as setting up a telco is a capital-intensive business. The list of viable local companies that can pony up that much money can be counted in one hand, and one has already tried and failed in the telco business before they even began.

It’s better to temper our expectations about the third telco for now. At the very least we’ll have to suffer two more years under our current duopoly before we have a real viable alternative.

While we’re waiting, it’s important for the government to keep a closer eye on both PLDT and Globe, specifically of customer complaints (which there are many) about their services, lost load and other issues. We’re all excited for a new player, but we have a long ways to go, unfortunately.