Philippines to prevent sellout by third telco operator to PLDT, Globe

MANILA (Reuters) - The Philippines will prevent a third telecoms operator set to be named by March from selling out to both PLDT Inc and Globe Telecom Inc to ensure the industry will not return to duopoly, a minister said on Sunday.

Presidential Communications Secretary Martin Andanar said the third operator is expected to invest 400 billion pesos to 500 billion pesos ($8 billion-$10 billion) over a five-year period in rolling out its telecom business.

The third player will be asked to sign an agreement that it will not sell out to its two rivals, he said.

“That is the beauty of the new agreement with the third player as there is such a clause there,” he said in a radio interview.

President Rodrigo Duterte has welcomed Chinese entities to be the Philippines’ third telecoms operator, following through on a threat he made last year to PLDT and Globe to shape up or face competition, following complaints about their services and uncompetitive prices.

State-run China Telecom Corp Ltd, KDDI Corp of Japan, and LG Uplus Corp of South Korea and an unidentified Taiwanese company are interested in setting up operations in the Philippines in partnership with local firms, Andanar said.

LG Uplus was looking at partnering with Philippine Telegraph & Telephone Corp, he said.

Last week PT&T told the stock exchange it was in talks with several companies including China Telecom and a South Korean telecom company, which it declined to identify, citing a non-disclosure agreement.

“These talks include possible partnership in terms of PT&T’s technical, financial and supply requirements for example, and is not limited to a mobile operator partnership,” it said.

Andanar said KDDI was also interested in bidding to become the Philippines’ third telecom operator, but the Japanese firm has denied this.

“It is not true that KDDI will enter the telecommunications business in the Philippines, but since KDDI is a global company, we are exploring various possibilities of expanding our telecommunications businesses overseas,” a KDDI spokeswoman said.

PLDT announced last month it will put aside a record high amount of at least $1 billion for capital expenses this year as it braces for the arrival of a third competitor. [nL4N1OK2OD]

Globe’s board has approved a capital expenditure budget of $850 million for this year, saying it seeks to improve internet services in the Philippines, “with the goal of becoming an admired nation for having first world internet connectivity”.

Reporting by Enrico dela Cruz; additional reporting by Karen Lema in Manila and Shida Yoshiyasu in Tokyo, editing by David Evans