China Telecom, Udenna Corp ink USD5.4bn deal to develop the Philippines’ NMP Mislatel

29 Apr 2019

Dennis Uy’s Udenna Corp and Chelsea Logistics Holdings last Thursday (25 April) signed a USD5.4 billion agreement with China Telecom to develop Mindanao Islamic Telephone Company (Mislatel), the consortium named as the provisional New Major Player (NMP), or third telco, in November 2018. The parties inked the undertaking in Beijing which they say formalises their ‘mutual undertakings and obligation’ to become the country’s third telco provider, Udenna said in a statement. ‘This is a historic occasion. This is another step forward in realising Udenna’s vision to improve the lives of Filipinos. Everything that we do is about making lives better not just for this generation, but for the next generation,’ opined Udenna chairman Dennis Uy.

Mislatel was provisionally selected by the Department of Information and Communications Technology (DICT) as the Philippines’ NMP late last year, but immediately faced problems over its credentials. Senate Committee on Public Services vice chair Francis Escudero admitted that there were defects in Mislatel’s franchise, noting: ‘According to the representatives of Mislatel, they did not make a public offering equivalent to 30% of their shareholdings owing to their non-operation.’ The franchise granted to Mislatel back in 1998 required it to be in operation one year after the franchise was granted, and to make a public offering of 30% of its shares. However, the company failed to launch, repeatedly blaming the ‘peace and order situation in Maguindanao’ as the reason. Some lawmakers argued therefore that Mislatel’s franchise was ‘deemed revoked’ for failure to operate a year after it was granted.

However, on 6 February the Senate allowed the transfer of control of ownership of Mislatel to the consortium led by Dennis Uy’s Udenna Corp, Udenna subsidiary Chelsea Logistics Holdings and foreign state-owned carrier China Telecom, paving the way for the consortium with the same name to mount a challenge against PLDT Inc. and Globe Telecom. Under the House resolution adopted by the Senate, Mislatel’s ownership structure will be: Udenna Corp (35%), Chelsea Logistics (25%) and China Telecom (40%), while the ruling also confirmed that the consortium will take over Mislatel’s operating franchise in the country. The following month, however, the Philippines’ anointed NMP pushed back the start date for its commercial operations in the country from late 2020 to early 2021, citing issues concerning the timely award of its operating certificate by the government.

Philippines, China Telecom Corporation, DITO Telecommunity Corp