President Duterte issues threat to break up Filipino telecom duopoly

10 Oct 2016

The Philippines’ often controversial new president Rodrigo ‘Rody’ Roa Duterte has warned the country’s two dominant telecoms providers – Philippine Long Distance Telephone Co (PLDT) and Globe Telecom – to improve their services or he will bring in competitors from China. In his speech during the National Banana Congress in Davao City, Duterte mentioned prominent businessman Manny Pangilinan (chairman and CEO of PLDT and Smart) and Ayala Corp (major stakeholders in Globe). ‘If you do not do it right, you wait, I’m going to China. I’ll open up everything for competition. I’ll just open up everything,’ the president warned.

Duterte’s statement comes in the wake of persistent criticism of the Philippines’ slow and expensive internet services – a fact that has repeatedly been attributed to their de facto duopoly status. Duterte’s unexpected rise to power has totally changed the game, not least given his very public antipathy toward what he sees as oligarchs in the country. Press rumours suggest that if he follows through on his threat the likes of China Mobile or China Telecom could be invited to take an active interest in the local market through a new state-run vehicle that could yet involve San Miguel Corp – which still technically owns crucial 700MHz mobile spectrum. That, however, depends on whether the May 2016 sale of its spectrum to PLDT and Globe is stopped by the Philippine Competition Commission (PCC), which appears increasingly possible in light of recent developments in the Court of Appeals.