Coronavirus outbreak causes delays for Philippines’ third telco launch, but data center opening may go ahead

By April 2020Data Center, News

Coronavirus outbreak causes delays for Philippines’ third telco launch, but data center opening may go ahead

Coronavirus outbreak causes delays for Philippines’ third telco launch, but data center opening may go ahead

The Philippines’ newest player in the telecommunications space has been forced to delay its commercial launch until March 2021 because of shipping restrictions caused by the COVID-19 outbreak.

Originally, DITO Telecommunity was scheduled for public consumption by the second quarter of 2020, but the country’s third telco is still committed to a technical launch in July 2020.

As part of this technical launch, regulators at the National Telecommunications Commission will conduct an audit to make sure DITO has reached its commitment to providing 27 megabits per second to 37% of the population.

The teleco’s Certificate of Public Convenience and Necessity could be withdrawn if these commitments aren’t met. But the company is confident they will meet the NTC’s requirements. 

Is the Philippines third telco on track to meeting their targets in time?

DITO, which secured a US$500 million from the Bank of China, has currently built 600 out of the 1,600 towers to be completed by July. 

DITO’s Chief Administrative Officer Adel Tamano said: “The data centers of DITO are very close to completion.”

The US$406 million data center at Clark Global City plans to bring up to 4,500 new jobs into the country.

Mr Tamano added the center will ‘bring innovative and cutting-edge technologies, from high-end 5G capabilities to top-tier data center infrastructure systems’.

If the telco failed to meet the commitments, it could receive penalties in the next five years, from US$170 million in the second year to US$42 million in the fifth year.

The Filipino Government suggested it would give the third telco some breathing room to meet their requirements.

Information and Communications Technology Secretary Gregorio Honasan said: “Of course we will give them some leeway, we are not that strict.The law, the regulations are not that rigid”

DITO has already found some success with its fiber network by signing an agreement with the League of Municipalities of the Philippines to directly connect by providing services and free WiFi to different districts.

The Philippines’ third telco promised to provide 55mbps internet speed to 80% of the population by its fifth year of operation.

Despite the setbacks caused by the coronavirus outbreak, DITO looks to achieve a 30% market share in the Philippines and compete with the existing duopoly held by Globe Telecom and PLDT, Inc.

But Globe and PLDT have increased expenditure this year with both planning to spend more than one billion dollars, while DITO looks to invest more than US$2 billion.

Watch this space for how each of the Philippines’ telcos manage the impacts of the COVID-19 outbreak and compete in a post-coronavirus world.

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