Threat to seize Philippines’ largest telcos: What’s at stake? Can gov’t do it?

July 29, 2020 - 6:38 PM
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Telco tower
Workers are pictured on a newly constructed Globe Telecoms tower in Imus, Cavite, in Philippines, August 8, 2018. (Reuters/Erik De Castro)

In his fifth State of the Nation Address on July 27, President Rodrigo Duterte challenged telecommunications companies to improve their services before December or they may face closure.

He specifically described the services of Ayala-led Globe Telecom Inc. and Smart Communications Inc., the wireless arm of PLDT Inc. led by PLDT chair and CEO Manuel V. Pangilinan, as “less than ideal.”

“Alam mo itong… I’ll be straight, iyong Smart pati itong Globe, ilang taon na ito, at ang sagot palagi sa akin, ‘the party cannot be reached.’ Eh nasaan pala pumunta ‘yung y*** na ‘yon?” Duterte said in his speech.

“Eh kung ganoon lang naman ibigay ninyo sa amin, we are a republic, a sovereign country, bear that in mind because the patience of the Filipino people is reaching its limit, at I will be the one to articulate the anger of the Filipino people. And you might not want what I intend to do with you,” he added.

Duterte said that Filipinos shouldn’t wait 10 more years before they could enjoy the quality of telco services in other countries.

He also threatened to seize telco firms if they are not ready to improve and the country would just return to landline telephones again.

“I might just as well close all of you and we revert back to the line telephone at kukunin ko ‘yan, i-expropriate ko sa gobyerno,” Duterte said.

In his rant against the two companies, the president rambled on calling Jesus Christ and accused them of giving Filipinos “half-cooked transactions, lousy service” that Filipinos pay for.

He then stressed that he would talk to Congress to find a way to shut them down if the deadline was not met.

“Tell us now if you cannot really improve on it because I will work by December. I have two years. The next two years will be spent improving the telecommunications of this country without you. I will find a way. I will talk to Congress and find a way how to do it,” Duterte said.

READ: Duterte threatens closure or gov’t takeover of ‘lousy’ telecom firm

Members of the House of Representatives last July 10 denied ABS-CBN’s application for a fresh 25-year franchise, which affected more than 11,000 workers across the country.

Duterte had also been vocal against renewing the broadcast giant’s previous franchise since the start of his presidency due to alleged critical reporting of his policies and not airing his political advertisements back in 2016.

Can the government seize telco providers?

What will be left when Globe and Smart are seized?

There’s another new telecom player in the market that seeks to challenge the long-standing duopoly of Globe and PLDT-Smart.

DITO Telecommunity Corporation just won its license to operate in the country in 2019.

It is formerly the Mindanao Islamic Telephone Co. or Mislatel consortium of Udenna Corporation, which is owned by Davao businessman Dennis Uy, Chelsea Logistics Company, and Chinese state-owned China Telecommunications Corporation or China Telecom.

However, China Telecom, one of the largest telecommunication companies in the world, had been fraught with cyber-security controversies and ranked low in the worldwide rankings of internet speed.


Editor’s Note: Manuel V. Pangilinan is chairman of PLDT-Smart. A unit under PLDT’s media conglomerate has a majority stake in Philstar Global Corp., which runs Philstar.com. This article was independently produced following editorial guidelines.