3rd telco starts in ’20, focuses on 4G

Dito Telecommunity Corp., the county’s third mobile player backed by China Telecom, is hoping to shake up the local telecommunications sector when it begins commercial operations next year.

Dito, which means “here” in the Filipino language, said it would initially focus on 4G, which was expected to remain the prevalent mobile standard over the next few years as 5G applications were being tested and developed.

“Our real focus is 5G but since the technology has yet to fully mature, we will roll out using 4G VOLTE [voice over LTE],” Dito spokesperson Adel Tamano said in a text message on Monday.

The company, formerly known as Mislatel Consortium,  is required to cover at least 37 percent of the Philippine population before July 8, 2020—a year after it was awarded its radio frequencies and certificate to operate.

“Our strategy is to significantly improve service by providing the highest quality network and using the latest technology leveraging on the strength of our partner, ChinaTel,” Tamano added. Dito’s Filipino partner is Davao-based businessman Dennis A. Uy.

Tamano did not comment on pricing, however, Dito said in a statement that it was planning to “deliver better customer experience at a reduced cost.” It promised to deliver a minimum average internet speed of 27 megabits (Mbps) per second on its first year, going up to 55 Mbps in succeeding years.

The arrival of Dito comes as the domestic market of over 100 million people clamors for faster and cheaper internet on the back of affordable smartphones and the growth of video streaming applications.

The regulatory environment has also grown more friendly with a cell-tower sharing policy being pushed and a mobile number switching scheme being implemented.

Dito, which will spend about P257 billion through its five-year commitment period, is going up against incumbents PLDT Inc. and Globe Telecom. Both are profitable and are investing well over P100 billion yearly to upgrade services.

Data from the GSM Association said there remained plenty of opportunities in the 4G space. The trade group of telco operators around the world said 4G would account for 64 percent of the Philippine market by 2025 versus 20 percent in 2018.

Globe launched 5G for home broadband last month while PLDT will enter the business in the fourth quarter of 2019. Still, GSMA expects 5G will account for 10 percent of the business by 2025 while 3G will account for 26 percent.

Dito said it would not offer 2G and 3G services, in part because these were aging standards and also because it was not awarded any 2G frequencies, which supported simpler mobile phones with only call and text features.

GSMA said 14 percent of the Philippine market used 2G last year and it would disappear by 2025.

Dito is the latest telco challenger to PLDT and Globe since the Gokongwei family’s Sun Cellular was launched in 2003. PLDT acquired Sun in 2011 but Dito will have no avenue to sell out unless it returns its frequencies to the government.

Dito’s formal awarding on Monday was made more than a year and a half since President Duterte launched the third telco initiative to raise competition. The bidding process was led by the National Telecommunications Commission under the Department of Information and Communications Technology.