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Filipino operators told to shape up or face Chinese competition

Notoriously pugnacious Filipino president Rodrigo Duterte has threatened to open the market to competition from Chinese firms if the two main players PLDT and Globe do not improve the quality of their service.

With mobile users in the Philippines typically only having very slow internet access and poor levels of service, Duterte stated ahead of a visit to China scheduled for 18th October: “if you cannot do it right, you wait, I’m going to China and I’ll open everything for competition”.

Between them, Smart (PLDT) and Globe account for 99% of the Philippines’ mobile connections. San Miguel Corp had been mulling an entry into the telecoms market in partnership with Australia’s Telstra, but instead sold its telecom assets to Globe and Smart in May this year as a joint acquisition, denying the market much-needed competition.  

Following this sale, the Philippine Competition Commission (PCC) stated that the acquisition would “likely” be detrimental to competition in the market and has tried to investigate the deal. However, Smart and Globe both filed for temporary restraining orders against the commission, blocking any review by court order.

In response, Communications Secretary Martin Andanar confirmed that the government was willing to give Smart and Globe some time to improve service reliability using San Miguel’s assets, especially in underserved rural areas.

However, he added that the Department of Information and Communications Technology could form a state-owned telecoms firm or sell a third licence in order to pressure them into performing better, saying  “we want to have vibrant competition and end the two-player competition, which is why it is called a duopoly.”

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