Dito Tel needs to offer more than competitive pricing to compete —Fitch

Third telco player Dito Telecommunity will have to offer more than competitive pricing for its mobile service to make a dent in a market dominated by two major players, global credit watcher Fitch Ratings said Thursday.

In its Fitch Ratings 2020 Outlook, the credit watcher said Dito Tel will have to provide really cheap mobile services.

“We believe the newcomer would need to offer more than a competitively priced mobile service to tap into fast-growing home-broadband and enterprise services to generate sufficient returns,” the report read.

Dito, formerly Mislatel Consortium, was declared by the National Telecommunications Commission (NTC) as the new major player (NMP) in the telecommunications industry late last year.

The company was awarded its permit to operate on July 8 this year.

In the near term, Fitch said Dito is likely to provide limited coverage, but its recent deals could accelerate its network rollout.

“Dito’s pledge to provide coverage for 37% of the population by July 2020 and up to 84% by 2024, suggests limited coverage in the short term,” Fitch noted.

Dito has committed to achieve 37.03% nationwide coverage at a minimum speed of 27 megabits per second (Mbps), and a capex/opex of P150 billion in its first year of operations.

By the fifth year, Dito Tel vowed to attain 84.01% nationwide coverage at a minimum speed of 55 Mbps, and capital and operation expenses of P27 billion.

Should the company fail to meet its commitments, Dito Tel stands to lose its P24 billion performance bond.

Dito has since inked deals with Sky Cable, LCS Holdings Inc., China Energy Equipment Co. Ltd., and ZEAL Power Construction and Development Corporation to accelerate its network infrastructure rollout. —VDS, GMA News