Coronavirus delays Dennis Uy's Dito launch

This file photo shows Udenna Corp. CEO Dennis Uy.

The anticipated entry of the third telco player suffered a fresh setback after the pandemic prevented a Dennis Uy-led company from meeting its target to deliver fast broadband connection to a certain number of people.

Ahead of its July 8 deadline for a “technical launch,” Dito Telecommunity is currently building 1,300 cell towers, with 300 already operational, but currently insufficient to meet committed speeds and network coverage, said Adel Tamano, the firm’s chief administrative officer.

A technical launch is where regulators check whether Dito's existing facilities are sufficient to meet commitments stipulated under licenses granted to the company. For 2020, targets were set at a maximum Internet speed of 27 Mbps to 37% of the archipelago.

“The COVID-(19) and the lockdowns have prevented us from our full rollout. With the subsequent easing of the different lockdown situations we are doing our best to get back on track,” Tamano said at a Senate hearing on Tuesday.

Dito is tasked to construct 2,500 cell towers by July 8, or a week from now, but Tamano said that number appears no longer necessary to achieve the desired network speed and reach. “Now to get the 37% coverage that is our requirement…, we only need, not 1,600 towers, but rather only 1,300 towers,” he said.

“We have 1,300 towers in construction, 300 of them are already live and it is our plan that within this year 2,000 towers will be completed,” he added.

A missed deadline for Dito indicates the company would be left with no choice but to ask for a grace period from the Department of Information and Communications Technology (DICT). Former DICT Undersecretary Eliseo Rio Jr., who was a resource person at the Senate hearing, said this means the company already exhausted one of the two grace periods on meeting roll-out targets under its franchise.

Once the company hits Strike 3, Rio said the government can forfeit on its favor the P25.7-billion performance bond Dito paid before construction activities, a sizable amount meant to prompt the China-backed firm to fulfill its commitments on time.

“As far as I know, they [Dito] have not requested for any postponement of that commitment… But definitely they are saying they could not have the 1,300 finished by July 8…. If they cannot comply by July 8, then that is their Strike One,” Rio said.

As of this posting, DICT has not responded to queries whether Dito already informed the department of any roll-out delays.

Over a five-year period that begins this year, Dito vowed to spend P257 billion to build its network and challenge the dominance of the telco duopoly, Ayala-led Globe Telecom Inc. and Pangilinan-chaired PLDT Inc., which have been heavily criticized for their shoddy network.

A huge chunk of the spending amount, P150 billion, was allotted for this year to build Dito’s main network. The telco firm targets to go live commercially by March 2021. It remains unclear how the latest delay would impact that launch. By: Prinz Magtulis (Philstar.com)

Source: Peso Economics