Globe and Smart in Duterte’s firing line again

Globe and Smart in Duterte’s firing line again

Filipino incumbents Smart Communications and Globe Telecom were threatened with closure by the country’s pugnacious president Rodrigo Duterte during his fifth State of the Nation Address.

Using the platform of his penultimate address, Duterte warned that the government could expropriate public utilities afforded to the operators unless they improved their “lousy” services by December this year.

Addressing the operators, Duterte said: “If you are not ready to improve, I might just as well close all of you and revert back to the line, telephone. I will take that and expropriate it for the government. Smart and Globe, how many years have they been running? I’m always told, ‘the party cannot be reached.’ Well, if that’s the case, just give it back to us.”

As reported by Submarine Telecoms Forum, Duterte has railed against the duopoly since his campaign for the presidency in 2016, when he notably said that he would “go to China” for mobile solutions unless the operators improved.

Acting on this threat, in 2018 the Philippines issued a third operating licence to DITO Telecommunity (formerly Mislatel), a consortium backed by China Telecom and led by Dennis Uy, a Singapore-based businessman and donor to Duterte’s 2016 campaign.

CommsUpdate noted that shares in DITO leapt by up to 10% following Duterte’s speech, despite a number of delays to its deployment amid the Covid-19 pandemic and the recent departure of two financial backers.

DITO’s chief administrative officer Adel Tamano said: “As far as DITO Telecommunity is concerned, we all share the concern of the president for the need to provide world class connectivity to the Filipino people, especially in the face of the pandemic.”

Tamano added “we recognise the clamour for the third major telco to already go on-air. DITO is doing all it can to work through the challenges, move forward, and launch soonest”, although he did not provide any firm information on the operator’s projected launch date.

Meanwhile, PLDT (Smart) and Globe saw their shares drop by 3.6% and 3.4% respectively in response to Duterte’s threat, prompting Globe to respond by saying that it was undertaking improvements, investing US$1.2 billion into “network and capacity builds” in 2020. Smart did not comment but has stated that it will invest PHP78 billion (US$1.54 billion) into its networks this year.