Market tremors after two DITO shareholders ‘withdraw funds’ from third telco

16 Jul 2020

The Manila Standard reports that over the course of the past few weeks two shareholders in DITO Telecommunity Corp (formerly Mislatel), the Philippines’ New Major Player (NMP) or third telco, have ‘withdrawn funds’ from the venture, raising concerns from the sector.

It is understood that the entire 30% stake of the Singapore-based fund of businessman Dennis Uy’s Dito CME Holdings was sold on Tuesday (14 July): according to Bilyonaryo.com.ph, citing public ownership records, ‘Singapore fund Accion divests from Uy’s Dito stock … Accion had zero shares in Dito CME Holdings based on its ownership report on July 14, 2020’. The report goes on to note that in August 2018, Accion had purchased 842 million shares for a total of PHP1.22 billion (USD24.7 million), at a time when the would-be NMP’s stock was soaring as it looked like being selected by the Department of ICT (DICT) and the National Telecommunications Commission (NTC) as the country’s third telecoms player to challenge the de facto duopoly of PLDT Inc. and Globe Telecom. The NMP was anointed on 7 November 2018, when it was provisionally awarded a nationwide franchise to construct, operate and maintain telecommunication facilities until 2023.

Further, the Manila Standard claims that in late-June this year former DICT Undersecretary Eliseo Rio Jr. withdrew 1.2 million shares in DITO Telecommunity, worth PHP44.4 million, leaving him with an estimated 2.3 million shares in Davao-based Uy’s venture. Neither Rio nor Accion have explained their decisions to divest their stakes, but the events come at a time when the new third telco is struggling to fulfil its target to launch services commercially in March 2021 due to delays in the construction of its new network. The former DICT Undersecretary has denied the Manila Standard report and said that he took ‘serious issue’ with the article. ‘I have never gotten any shares much less downloaded any from DITO … The source of your report is a blog that is publishing fake news,’ Rio told the Standard.

As previously reported by CommsUpdate, at the start of this month Adel Tamano, Chief Administrative Officer at DITO Telecommunity, said the newcomer would not meet its 8 July 2020 deadline for a ‘technical launch’ of its network, and confirmed that a week ahead of the deadline it had deployed only around 25% of the required number of cell sites needed to fulfil its first-year commitment to the government. Soon after, DITO was granted a six-month extension to comply with its government-mandated technical audit, with the DICT saying: ‘In relation to the delay caused by the COVID-19 crisis, the NTC issued a resolution extending the July 2020 technical audit under the CPCN [Certificate of Public Convenience and Necessity] provisions,’ and adding that ‘Under the current extension, DITO is given within six months to deliver the commitments for the technical audit requirements – that is to provide a speed of 27Mbps to cover 37% of the population’. The ruling refers to the CPCN which was awarded to DITO on 8 July 2019.

Philippines, DITO Telecommunity Corp (formerly Mislatel)