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Archive for the tag “China Telecom”

Philippines: Are we seeing a slow Chinese takeover?

Certainly, the massive loans given to the “Build! Build! Build” are starting to cost. As the big infrastructure projects and other loans are taking their toll on the economy. Therefore, the Philippines and President Rodrigo Duterte are trying to collect something. It seems like the Chinese counterparts are getting lots of collateral and salvage the spent funds in Philippines. Because, as the weeks goes by and the ASEAN friends, the one with the upper-hand is China.

This is surely not how Duterte want it too look, as they are having a bargain. There has already been putting into question the control of Benham Rise and the hard-won control of the island there. Still, the Republic haven’t fought with tooth and nail to get it back. This week, it seems like there are more installations on it. The sovereign Philippines are being toyed with by China. They are being fooled and has to accept deals, because of the loans to Beijing. Manila is indebted and has to give concessions. Why else, would this week be filled with new Chinese interference and getting licenses in the Philippines?

Weather Station Controversy:

“It is currently coordinating with concerned government agencies, as well as with the Philippine Embassy in Beijing to verify the existence or non-existence of these alleged facilities,” he said. Panelo earlier addressed this concern on Monday saying Foreign Affairs Secretary Teodoro Locsin jr. will “do his job” once the reports have been verified. China’s Foreign Ministry Spokesperson Lu Kang announced on November 1 that Beijing has already begun operating weather stations on the artificial islands in South China Sea. “These projects are designed to observe the maritime, hydrological, meteorological conditions and air qualities, and provide such services as maritime warning and forecast, tsunami alert, weather forecast, air quality forecast, and disaster prevention and relief,” Lu Kang said in a press conference” (Janine Peralta – ‘Philippines to take action if Chinese weather stations in South China Sea are verified — Palace’ 06.11.2018 link: http://cnnphilippines.com/news/2018/11/06/ph-china-south-china-sea-panelo.html).

Oil Fields:

One of the projects included an exploration between state-owned Philippine National Oil Company (PNOC) and Chinese state-owned CNOOC Ltd., located off Calamian in southwestern Palawan province, Cusi told Manila Bulletin in a news briefing. Cusi was referring to Service Contract 57 which covers an oil and gas project awarded to PNOC’s exploration unit, and picked CNOOC as a partner. Cusi did not share details for Service Contract 72, an exploration permit held by the Philippines’ PXP Energy Corp. for Reed Bank, but clarified that the Reed Bank, another disputed South China Sea area, is not of the two” (Meanne Rosales – ‘ PH to seal 2 exploration deals with China’ 09.11.2018, link: https://powerphilippines.com/2018/11/09/ph-seal-2-exploration-deals-china/)

Chinese Telecommunication as the Third Telco:

Philippine President Rodrigo Duterte has lauded the entry of China Telecommunications Corp., or China Telecom, in his country’s telecommunication industry, saying the Philippines stands to benefit from the “good competition” that a Chinese company will bring to the industry” (…) “Duterte said that China “has proved to be of very incredibly high quality of electronics.” “(Xinhuanet – ‘Duterte welcomes China Telecom’s operating in Philippines’ 08.11.2018).

As we see, the sudden Benham Rise in the South China Sea and the will of China to takeover the place, while the Malacañang are preoccupied with sneering at priests, Rappler and who else who hurt their pride. They are not seeing or looking away from the sovereign implications on Benham Rise. As there are talks already of military installations, but now also monitoring equipment and a weather station. Clearly, the Chinese sees it as their land, while the PH are busy trying to find out what is happening there.

Than, you have the oil-fields in the same region, where the Chinese National Offshore Oil Company (CNOOC) have gotten licenses to drill oil there. Clearly, this is all intentional, as well as they are the lucky third Telecommunication Company and getting into the Cellphone business too. This is just fitting as a glove. They are both getting territory in the South China Sea, they are getting exploitation opportunities and steady profits through a cell-phone carrier. All this they have gotten for dropping some loans, that is hard for the Philippines to repay in cash.

That is why they are allowed to get these things, as collateral for the debt. This is a game the Chinese plays well. That is why this is all happening. We have seen similar efforts done in Sri Lanka. That will surely happen in the Philippines too. As the Chinese is not forgiving with their loans. They want points on the dollar. Not loose money and certainly not lose face on the investments made. Peace.

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SONA 2018: Another promise to end the Telecom duopoly, but when?

There is again promise of ending the reign of Globe and Smart in the Telecom business. Theis has been a steady process. Before today’s announcement at the State of the Nation address in Parliament, the Duterte Administration offered the same promise last year, and the Duterte administration has proposed this before. Therefore, this isn’t new, but more about when and who want into the business. First, read the passage of today’s speech concerning the industry, second, seeing the ancient ordeal between the duopoly and third, the DICT proposed third company into the market.

“My administration remains firm in its resolve to ensure that the country’s telecommunications services are reliable, inexpensive and secure. A draft Terms of Reference for the entry of a new, major industry player is at hand. The terms will be fair, reasonable and comprehensive. It will be inclusive so it will be open to all interested private parties, both foreign and local. The only condition is that the chosen entity must provide the best possible services at reasonably accessible prices. However, our efforts to usher in a new major player shall be rendered futile if we do not improve its odds of success in an industry that has long been dominated by a well-entrenched duopoly. We shall, therefore, lower interconnection rates between all industry players. Not only to lessen the cost to the consumers as it will also lower the costs [for the] incoming player to access existing networks, [thereby creating] a market environment that is more conducive to competition. This is a policy which is crucial to ensure that our solution to our telecommunication problems will be both meaningful and lasting. In the last 2 years, experience has taught me that lack of consultation or insufficiency of information can, at times, lead to rash judgments. If and when I am unsure on the most appropriate course of action to take given the problem, it’s factual milieu and the desired end, I never fail to consult to discuss options with persons whom I trust and whose advise I value” (Rodrigo Duterte SONA 2018, 23.07.2018).

Globe Telecom, Inc. was registered in the Securities and Exchange Commission in 1935. It claims to provide mobile and broadband services to 55 million people. The owners of Globe include foreign company Singapore Telecom (SingTel) and Ayala Corporation, with Jaime Zobel de Ayala as the company’s chairman. Smart, meanwhile, is wholly owned by Manuel V. Pangilinan’s Philippine Long Distance Telecommunication (PLDT) Company. It claims more than 68.9 million cellular and broadband subscribers. In his book Colossal Deception, How Foreigners Control our Telecom Sector, journalist Rigoberto D. Tiglao said the biggest controlling stockholder in PLDT is actually Indonesian mogul Anthoni Salim through his HongKong-based company First Pacific, where MVP sits as managing director and chief executive officer” (Reporters Without Borders – ‘PCC scrutinizes Globe, PLDT deal’, 2016).

“As previously reported by CommsUpdate, earlier this month Eliseo Rio, Jr said that the naming of the much anticipated ‘New Major Player’ (NMP) could take place by the end of September or early October this year, barring unforeseen setbacks. DICT published its draft terms of reference (TOR) for the selection of the NMP to challenge dominant players PLDT and Globe Telecom on 26 June. The selection process has been delayed for months – an original March 2018 deadline proved unrealistic – but DICT has now released details on how it plans to assign valuable 3G, 4G and potential 5G mobile frequencies to allow a newcomer to challenge the status quo. Pursuant to the above, DICT held public consultations on 6 July – a process that seemingly concluded that of those that expressed an interest in the selection process, 75% prefer a points-based allocation system, using the HCLoS method. Only 8% of potential bidders preferred the second set of draft rules which entailed auctioning the frequencies with a minimum bid of PHP36.58 billion (USD583.4 million)” (Telegeography – ‘DICT official throws support behind HCLoS to select third telco’ 17.07.2018).

It seems like the Administration is struggling to find someone who will find it profitable and even possible to breach the duopoly at this point. As the Smart and Globe owns the market and shares, they have the infrastructure and the means to control it. Therefore, they are nearly holding the same shares of the market and also the profits from the segments. Surely, many has both, as the black-outs and other forces them to have second sim-cards to secure their communications themselves.

Especially also with the strict ownership rules and regulations in the Philippines, plus the strength that Globe and Smart have, it will be tricky to gain profits at first. There are reports of China Telecom, ZTE from China and also Korean PT&T. But nothing of that is certain at this point and whoever it might be. Will have a challenge.

This will not just be about having a third competitor into the telecom market, but also coming in as a ugly step-child where two companies are ruling all supreme. Unless, they come with cheap and better services from day one and is able to deliver at a rate the other two cannot. Than, it might have a fix, if not it might be a risky investment and sold quickly to either of these. Peace.

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