By Emmie Abadilla
The National Telecommunications Commission (NTC) -Selection Committee on Monday officially declared Mindanao Islamic Telephone Company (Mislatel) the New Major Player (NMP).
Mislatel Consortium of Dennis A. Uy’s Udenna Corp. and China Telecom was initially named provisional third telco shortly after the NMP bidding on November 7, 2018.
The government will grant a set of 3G, 4G, and potential 5G radio frequencies to Mislatel as the NMP so it can provide voice, text, and mobile Internet services to subscribers and compete directly with the duopoly of PLDT Inc./Smart Communications and Globe Telecom, Inc.
Mislatel’s proposal garnered 456.8 points out of a possible 500 points under the NTC-Selection Committee’s grading system.
The consortium proposed to cough out P258 billion to build a telco network, cover 84 percent of the country’s population within its half-decade commitment period to the government.
In its first year of operations, Mislatel committed to bring up the minimum average Internet speed to 27 megabits per second (mbps), increasing it to 55 mbps in the succeeding years.
But while some analysts, like Fitch Ratings-Singapore, say that a third telco “will stir up the waters and jack up competition, likely putting an end to the country’s long-standing duopoly market,” both PLDT and Globe do not expect the NMP to threaten their market share, especially on its first year of operations.
The question is: how long will it take Mislatel to build their network?
To attain the average speed and the 33 percent coverage they have committed to the government, it will take them two to three years, according to top executives of both PLDT and Globe – unless they have a genuine surprise up their sleeves.
“The impact of the third player won’t be significant (to us) in the first year although they can conjure something new or creative,” says PLDT and Smart Communications, Inc. Chairman, President, and CEO Manuel V. Pangilinan. “It depends on how fast the third telco will build out their infrastructure.”
“The third player will most likely focus on wireless,” he reckoned. “Fixed line is where the market strength of PLDT lies.”
Actually, Globe President and CEO Ernest L. Cu doubted if Mislatel can provide an average minimum broadband speed of 27 mbps in its first year of operations and 55 mbps on its second, as committed.
“There’s no telco that can do that in one year, in my opinion. It takes 24 months. We use the same equipment, we go through the same permitting process. Let’s see,” he remarked.
He also doubted if Mislatel can deliver its population coverage commitment of 37.03 percent in the first year and 84.01 percent cumulative coverage in five years.
“Other than (India’s) Reliance Jio, I don’t think any telco in the world can get significant market share from incumbents in their first year of operations,” Cu stressed.
Significantly, “Reliance Jio, before they launched, was building for four to five years. They had a few hundred plus thousand cell sites by the time they launched.”
The Mislatel Consortium has partnered with China Telecom, one of China’s largest mobile telco providers. However, the rules of the game in China is different from here, Cu noted.
“There’re nuances in every country with regards to telco. The regulatory framework is different. We have a very complex regulatory framework from national government, the local government units (LGUs) down to the barangay level. So I hope they took that into consideration when they promised they would roll out that much in one year.
Because today, we still have pending cell sites,” he elaborated.