Dito Telecommunity attains 25-year franchise

by Nina Tambal / August 28, 2020

The House of Representatives approved the franchise bid of Dito Telecommunity on Monday, August 24.

The approved House Bill 7332 had 240 affirmative votes, 7 negative votes, and no abstention. It grants Dito Telcommunity a 25-year franchise as the country’s third major telecommunication player. Meaning the company may “construct, install, establish, operate, and maintain wired and/or wireless telecommunications systems in the Philippines”.

Formerly known as Mindanao Islamic Telephone Company (Mislatel), Dito Telco is led by Davao-based businessman, Dennis Uy. Last June 6, the original bill for its franchise renewal, HB No. 6917, was filed. Meanwhile, the committee report was filed on August 10 and swiftly approved on second reading a day later. Now that the bill has been approved in the lower chamber, the Senate can begin deliberations on Dito’s franchise.

“The franchise shall be extended and in effect for a period of 25 years from its expiration on April 24, 2023, unless sooner revoked or cancelled. This franchise shall be deemed ipso facto revoked in the event the grantees fail to operate continuously for two years,” the bill stated.

Dito Telecommunity is required to provide an average minimum internet speed of 27 megabits per second (Mbps) to at least 37 percent of the population under its franchise. The telco company was also obliged to put up 2,500 cell towers by July 8, 2020, for its official technical rollout.

However, they were unable to reach their target in early July, citing the coronavirus pandemic as the cause of delay. Dito chief administrative officer, Adel Tamano, also indicated that they had completed 300 operational cell sites, which is less than a quarter of the required cell towers.

Dito Telco is now aiming to roll out commercially and publicly by March 2021. For a condition in the terms of their franchise states that if they fail to operate continuously for two years, their franchise will be deemed revoked. While they are allowed to miss their targets twice, the telco will lose its PHP 24 billion performance bond if they miss the target a third time and beyond.

Composed of Chelsea Logistics and Infrastructure Holdings Corp., Udenna Corp, and China Telecom, Dito Telco was selected as a major player in the telecommunications industry by the National Telecommunications Commission in 2018. Their franchise as Mislatel was questioned after being unable to operate within the year, but because lawmakers called for a third player to improve the country’s telecommunication services, their franchise was retained.

With a new challenger entering the playing field of telecommunications, all eyes are on Dito Telco, observing how they will fare alongside the biggest telcos of the country. After all, the swift approval of their franchise renewal (just under three months) seems to indicate strong credibility and potential. Proving that other companies can have their own franchise renewal in the pipeline for years, but end up getting denied.