Corporate Securities Info

Perception issue of new telco

/ 04:01 AM September 22, 2020

After a six-month delay caused by the COVID-19 pandemic, Dito Telecommunity, the company tapped by the government to compete with PLDT Inc. and Globe Telecom, announced recently it would be operational by March 2021.

Dito is the government’s response to decadeslong complaints about poor and inadequate services by PLDT and Globe. It is envisioned to give the two telcos the competition that would compel them to improve their services.


The ploy apparently worked because shortly after Dito took over the franchise of a moribund telco to enable it to operate in the Philippines, PLDT and Globe Telecom ramped up efforts to upgrade their infrastructure and improve internet connectivity.

It looks like they want to lock in as many subscribers as possible, especially heavy users of the lucrative broadband service, so that by the time Dito becomes operational it would be picking up only the crumbs, so to speak.


Although Dito’s strategic partner, China Telecom, is reputed to have the facilities and technical expertise for 5G (the most advanced system for cellular communications), there is no assurance the technology can efficiently operate in the country and that it would be affordable.

Bear in mind that Dito is not engaged in a missionary activity. It is investing billions of pesos with the expectation that its stockholders would get a fair return on their investments at the earliest time possible.

Thus, its services should not only be better than those of PLDT and Globe, but also priced in a manner that would attract such volume of subscribers that would make its business profitable.

Dito would be entering the market with a serious perception or image problem arising from its partnership with China Telecom, a company owned by the Chinese government.

In a mobile phone survey conducted by Social Weather Stations from July 3 to 6, Filipinos’ trust in China dipped from “poor” to “bad” with a net trust rating of -36. This represents a 9-point plunge from its net trust rating of -27 in December 2019.

This strong expression of mistrust may be traced to China’s continued illegal occupation and reclamation of islands within the Philippines’ exclusive economic zone.

What’s more telling is that adverse feeling persists in spite of President Duterte’s repeated public praises for China for its alleged generosity in giving economic and other forms of assistance to the Philippines.


Last week, several sectors raised a howl over the action of the Armed Forces of the Philippines in allowing the construction of Dito’s cell towers in select military camps.

They raised concerns about those facilities giving China, through China Telecoms, eyes and ears on confidential military information. That espionage apprehension is not without basis.

The 2017 National Intelligence Law of China states that “any organization or citizen shall support, assist and cooperate with the state intelligence work in accordance with the law.”

Then there is the 2014 Counter-Espionage Law, which states that “when the state security organ investigates and understands that situation of espionage and collects relevant evidence, the relevant organizations and individuals shall provide it truthfully and may not refuse.”

Rightly or wrongly, trust and privacy issues would be at the back of the mind of Filipinos who may be interested in subscribing to Dito’s services.

What is the assurance that China Telecom, through its staff who shall be part of Dito’s operations, will keep confidential sensitive information about its subscribers and not find their way to China’s intelligence data bank?

Would subscribing to Dito’s services and, in the process, making China Telecom profitable, constitute an indirect show of supprt for China despite its aggressive actions against the Philippines?

Dito should take these issues into consideration when it commences its subscriber solicitation campaign. The Filipinos’ sense of nationalism vis-à-vis China is not something to sneer at or ignore. INQ

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