Dito told: Deliver 27 mbps internet speed before franchise renewal

Senators on Monday served notice to Dito Telecommunity Corporation to deliver the 27 megabits per second (mbps)internet speed among other commitments, before its application for franchise renewal could be considered.

The franchise of the country's third major telco player  is set to expire in 2023.

In a Senate hearing on Monday, Senate Committee on Public Services chairperson, Senator Grace Poe-Llamanzares, reminded that Dito should first meet the commitments it made by its first year of operations.

In its bid to compete with incumbents Globe Telecom Inc. and PLDT Inc., Dito Telecom vowed to provide a minimum speed of 27 mbps and achieve a nationwide coverage of 37.03% in its first year of operations on or before July 8, 2020, else lose its P24 billion performance bond.

However, the National Telecommunications Commission (NTC) gave Dito six more months to comply, citing scheduling issues on the delivery of material supplies from China given the COVID-19 pandemic.

The Dito consortium is made up of Uy's Udenna Corporation, Udenna's subsidiary Chelsea Logistics Holdings Inc., and Chinese state-owned China Telecommunications Corporation.

"Here's the thing —when Dito applied for this franchise and made all these commitments, they should have had the forecast of what they were going to spend already," Poe said during the hearing.

"They should not have anticipated that they get a renewal of their franchise unless they're able to produce the commitments that they were able to make without the additional funding based on the 25 years that they are expecting to get," she added.

Poe noted that the Senate panel is avoiding having the rollout of service being held hostage by the franchise renewal, as she said the company made commitments and it should therefore meet such deliverables.

"What we're trying to prevent here is that other applicants will anticipate a renewal and then they're not anymore rolling out unless they get that renewal of the franchise," she said.

"I don't want our committee to be a hostage of that so the basis really of granting the franchise, because we'll be remiss also in our responsibility, is that they're able to provide at least the initial commitment they gave," added the senator.

For his part, Senate Majority Leader Juan Miguel Zubiri warned that the company may find it hard to secure capital requirements absent a franchise.

"This is going to be the third telco so this is going to be a big responsibility on their part. They have got to come up with deliverables," he said during the same hearing.

For his part, Dito chief administrative officer Adel Tamano said that scoring a franchise renewal sooner would give more confidence in the company.

"If the question is can we wait 'til 2023, your honor I think to protect the public since they will be investing in SIM cards and phones from our company, we would really humbly ask this honorable committee to approve extension well before that," he said.

"Of course I think there will be more confidence in the viability of our enterprise if the franchise is extended," he added.

Earlier in the hearing, Dito chief technology officer Rodolfo Santiago said the company is optimistic to cover close to 10,000 barangays before the end of the year, prior to its commercial rollout set in March 2021.

Shares in DITO CME Holdings Corp., the holding company for the Udenna Group's telecommunications businesses, closed Monday at P7.61 apiece, up by P0.69 or 9.97% from last Friday's finish of P6.92 apiece.—LDF, GMA News