Mislatel takeover by China Telecom-Dennis Uy consortium approved by Congress

23 May 2019

The Congress of the Philippines have approved the acquisition of Mindanao Islamic Telephone Company (Mislatel) – the country’s New Major Player (NMP) or ‘third telco’ – by the consortium led by Dennis Uy’s Udenna Corp, Udenna subsidiary Chelsea Logistics Holdings and foreign state-owned carrier China Telecom. The decision taken by lawmakers in the country on 20 May means that the third telco can finally apply for the requisite permits and permissions to operate in competition with de facto duopoly PLDT Inc. and Globe Telecom. Previously, in February this year the Senate allowed the transfer of control of ownership and operating franchise in the NMP with its new ownership structure as follows: Udenna Corp (35%), Chelsea Logistics (25%) and China Telecom (40%). Prior to the decision, Senate Committee on Public Services vice chair Francis Escudero had 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.

In the wake of the Congressional ruling, Eliseo Rio Jr., acting secretary of the Department of Information and Communications Technology (DICT), said that the regulator, the National Telecommunications Commission (NTC), would now need 15 days to issue a certificate of public convenience and necessity (CPCN) as well as a coveted allocation of 3G, 4G and potential 5G radio frequencies to Mislatel – subject to it paying the necessary PHP25.7 billion (USD490.4 million) bond.

Philippines, China Telecom Corporation, DITO Telecommunity Corp