Lorenzana signs deal for China-backed Dito to put up cell towers in military camps

China-backed Dito Telecommunity has been officially allowed to put up cell towers inside military camps, Defense Secretary Delfin Lorenzana said Tuesday.

The Cabinet official told House members that he recently signed an agreement allowing the new telecommunications player to install cell towers within camps, similar to mobile service providers Smart and Globe.

Last year, the Armed Forces of the Philippines allowed the country's third telco player to set up communications equipment in its camps, but was halted amid security concerns raised by some lawmakers about allowing the China-backed firm to do so.

Lorenzana explained that the document was submitted to him in 2019 but went under Senate review.

"They came out with nothing naman, wala silang complaint or any recommendation on the contract. It was returned to us," he said, noting that the AFP pledged to install safeguards.

However, Cagayan de Oro Representative Rufus Rodriguez said it was wrong to compare Smart and Globe with Dito, as the latter is 40 percent owned by a Chinese state-run company.

"Can you imagine there will be Chinese (individuals) allegedly employees of Dito who may be spies for China – where we have a conflict especially in the West Philippine Sea – entering our camps and being able to secure installations which should not be known by outside forces?" Rodriguez emphasized during the agency's budget hearing.

Dito is a brand built through the partnership of businessman Dennis Uy's Udenna Corporation and Beijing-run China Telecom through a $5.4 billion (about ₱60 billion) investment deal last year. The joint venture plans to put up 10,000 cell towers in the next five years.

Dito paid a ₱25.7-billion performance bond to the government as it pledged to provide internet service with a speed of 27 megabits per second to more than a third of the population on its first year of operation. Failure to deliver meant the government gets to keep the money.

The third major player pushed back its rollout target from July 2020 to next year, saying lockdowns due to the pandemic delayed its processes.

Meanwhile, Lorenzana supported President Rodrigo Duterte's order to honor all other contracts with Chinese firms despite a blacklist by the American government, a retaliatory move against Beijing's incursions in the South China Sea.

"If we will get out of the contract, granting it has been signed, then we will be slapped with huge damage," the defense chief said, adding that projects like the ₱500-billion contract for the Sangley airport upgrade was secured "fair and square."

By Melissa Luz Lopez, CNN Philippines

Source: Peso Economics