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Mislatel: What to expect from the Philippines’ 3rd telco

In Business by Ramon LopezLeave a Comment

Mislatel Consortium — comprised of Udenna Corporation, Chelsea Logistics Holdings Corporation, and China Telecom, said to be the third-biggest telecom operator in China — has been declared the third telco in the Philippines.

The announcement came after a long and arduous process that also disqualified two other bidders, namely the Philippine Telegraph and Telephone Corporation and Sears Telecommunications Inc.

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The two tried to appeal the Department of Information and Communications Technology ruling but were denied for lack of merit. Other potential parties like Converge ICT backed out even before the selection process concluded, leaving Mislatel with the only valid bid.

READ ALSO: Smart offers better video streaming than AT&T, Sprint — study

And so here we are — with a new major player to challenge Globe Telecom and PLDT in the local telecom sector with an estimated annual revenue of P239 billion or $5 billion a year.

Which sets up the obvious question: How will this development affect consumers and the industry? But before we dig into Mislatel’s impact, it’s important to look at the proposal that will shape the future of the Philippines’ telecom business.

Mislatel’s proposal was approved on the premise that it will provide fast and affordable internet access in the country within five years of operation and P257 billion or $4.88 billion in total money spent.

Its five-year commitment entails an 84-percent service coverage in the Philippines with a minimum connection speed of 55Mbps, with a performance bond of P25.7 billion or 10 percent of its total expenditure for the next half decade. It stands to lose that bond, plus all the telecom frequencies awarded to it, if it doesn’t live up to its promises.

Mislatel’s five-year commitment entails an 84-percent service coverage in the Philippines with a minimum connection speed of 55Mbps and with a performance bond of P25.7 billion or 10 percent of its total expenditure for the next half decade.

Mislatel’s initial plan will cover 37 percent of the Philippines with a minimum speed of 27Mbps. DICT requires that the third telecom player should be able to service at least 10 percent of the population with a 5Mbps connection in the first year of operations.

Assuming it passes the DICT’s 90-day post-qualification process, which will give Mislatel the necessary certification and frequencies to operate, the company has five years to roll out its infrastructure and compete with existing players. As we mentioned earlier, the DICT also requires that the company begins operations in year one even if only a small percentage of the country can subscribe to its services.

This means that by next year or early 2020 at the latest (if Mislatel takes the full 90 days to comply with DICT’s post-qualification requirements), some, not all, of Mislatel’s cell towers should already be up and running.

SEE ALSO: Globe vs PLDT vs Converge ICT: Our experience so far

Of course, it remains to be seen what speeds will be reachable initially, but DICT’s 5Mbps requirement isn’t so bad for video streaming and casual online gaming. If you must know, Netflix only requires a 3Mbps connection to stream an SD-quality video and 5Mbps for HD content. 

Well, that depends on exactly how much Mislatel will price its services and how fast it can scale up to cover more of the country. We don’t have the answers for both at this point.

We do know that Globe and PLDT have been operating for more than two decades. And both operators are on the verge of rolling out faster 5G services commercially. Mislatel will have a lot of ground to cover, and time isn’t on its side either.

READ ALSO: Globe Telecom to roll out 5G services in 2019

Reports say the new operator intends to enter the sector through a price war. That’s not hard to imagine considering its underdog status, but its service should be satisfyingly fast and reliable first and foremost. If it will indeed be better and cheaper than existing networks, there’s really no reason for people not to switch, right?

The Philippine government obviously thinks Mislatel will figure things out. Acting DICT secretary Eliseo M. Rio Jr. was quoted as saying that one of the ways Mislatel can follow through with its plans is to use the facilities and services of other small players, like the fiber-optic cables of Converge ICT and broadband satellite of Sears Telecommunications Inc.

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Ramon Lopez

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Reviews editor: Ramon "Monch" Lopez has 10 years of professional experience creating and editing content for print and digital publications such as Yahoo. He headed the gadgets-merchandising division of one of the Philippines’ largest retail operators somewhere in between. His latest addiction is the comments section of viral Facebook posts.