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China Telecom chosen to enter PHL as third main telco player

China Telecom Corporation Limited has been chosen by the Chinese government to enter the Philippine telecommunications industry as the third player, Presidential Communications Secretary Martin Andanar revealed Sunday.

In an interview on GMA Super Radyo dzBB, Andanar said Department of Information and Communication Technology (DICT) OIC Eliseo Rio reported that China Telecom will be investing in the country's telco industry.

"'Yung huling Cabinet meeting which was 'yung last week lang, ay ni-report ni Acting Secretary... na nakapili na ang Chinese government ng company sa China na mag-iinvest sa telco dito sa bansa natin," he said.

"Ito ay ang kompanyang China Telecom. Ang China Telecom ay ang pinakamalaking telecommunications company sa China. Marami kasi 'yun, maraming telecommunications company 'yan eh," he added.

China Telecom is one of the top telecommunications companies in China, with its shares listed on both the Hong Kong Stock Exchange and the New York Stock Exchange.

According to the company's first-half financial report, it had a total of 230 million subscribers as of end-June, accounting for a 16.8-percent market share in China.

For the six-month period, China Telecom posted operating revenues of RMB176.828  billion (P1.348 trillion), bringing its net profit to RMB11.673 billion (P89.022 billion).

The company, however, will be forced to partner with a Philippine company as public utilities in the Philippines may only be 40-percent owned by foreign investors under the 1987 Philippine Constitution.

"Ang problema lang kasi dito sa bansa natin, if you are a foreign investor, you cannot go beyond 40 percent [ownership]. Eh papaano 'yun, diba so siyempre kailangan maghanap ng partner dito sa Pilipinas," Andanar said.

"'Yung mga partner na hindi pipitsugin, 'yung maraming pera... 'Yung mga telecom franchise... Ano ba 'yung mga may telecom franchise—'yung PT&T dati. Hindi ko lang alam kung ano pang ibang kompanya, pero marami 'yan eh," he added.

He was referring to locally listed Philippine Telegraph & Telephone Corp. (PT&T), which was earlier reported by Reuters to be in talks with eight Chinese companies for a possible partnership.

In a filing to the Philippine Stock Exchange (PSE), PT&T last month confirmed it is looking to invest an estimate of $200 million over to expand its broadband business in key areas over the next three years.

It clarified, however, that the amount "covers only the expansion of our fixed broadband business and does not cover a possible future venture into the cellular business."

With this, Andanar said the government is now rushing the entry of a third player to disrupt the current duopoly of Ayala-led Globe Telecom Inc. and Pangilinan-led PLDT Inc.

"Minamadali na ito ng gobyerno natin sa pagkat habang tumatagal ay nabibwisit ang mga kababayan natin," he said.

"Ang Presidente mismo ay binuksan niya na ang pintuan ng bansa natin para magkaroon ng third player," he added.

To recall, Presidential Spokesperson Harry Roque last month said President Rodrigo Duterte offered China the opportunity to enter the Philippine telco industry.

"During the bilateral talks between President Duterte and the Chinese Premier, President Duterte offered to the People's Republic of China the privilege to operate the third telecoms carries in the country," he said. — BM, GMA News