Palace allays fears on cybersecurity upon entry of Chinese telco

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Metro Manila (CNN Philippines, December 21) — The Palace on Thursday allayed fears that China's entry into the local telecommunications industry may compromise the country's cybersecurity.

Presidential spokesperson Harry Roque said the government is already "worried" about it, which is why President Rodrigo Duterte directed the Department of Information and Communications Technology (DICT) to take the necessary steps to protect the people's online security.

"The marching order really is to ensure the country's cybersecurity," Roque said.

Former President Benigno Aquino III earlier said the Chinese telco would place national security at risk.

"Mahirap naman yatang 'yung communications infrastructure mo eh sa potential na baka magkaroon tayo ng actual na conflict (I think it would be difficult if your communications infrastructure is with a country that the Philippines could have an actual conflict with)," Aquino earlier said.

Meanwhile, Duterte said he had instructed the DICT and the National Telecommunications Commission (NTC) to fast-track the entry of the Chinese telco firm, for it to be operational by the first quarter of 2018.

READ: Duterte: Third telco provider must be in by March 2018

Malacañang said on December 10 that the Chinese government has chosen China Telecom.

Roque said this timeline is doable, as China Telecom may not need to secure a legislative franchise to operate because they will have to partner with a local company with an existing franchise.

"I think the fact that they are only entitled to minority shares would mean they would have to partner with a Philippine corporation with an existing franchise," Roque said.

China Telecom will own 40 percent of the third expected player, while a consortium of Filipino companies will share  the remaining 60 percent, Roque said.

Article XII, Section 11 of the 1987 Constitution limits foreign ownership in public utilities "to their proportionate share in its capital" and mandates that "executive and managing officers of such [a] corporation or association must be citizens of the Philippines."

The limitation in ownership covers telecommunication services.

Duterte has been vocal against the state of the internet in the Philippines, saying the only way to improve internet speed is to introduce competition.

During Duterte's bilateral talks with Chinese Premier Li Keqiang in Manila on November 15, he offered China a chance to supply the country's newest telecom provider, Malacañang said.

This will finally break the duopoly, Trade Secretary Ramon Lopez earlier told CNN Philippines' The Source. The market in the Philippines has been dominated by two players - Globe Telecom Inc. and PLDT Inc.

READ: Roque: Duterte's offer of telco role to China a 'political decision'

Senate President Koko Pimentel welcomed a new telco provider, saying competition was "the only way to force the two major local telco companies to improve their services."

The Philippines was among the lowest-ranked countries in a report by mobile network research firm OpenSignal. The country ranked 74th out of 77 countries in 4G network speeds, and 69th on availability.

READ: Report: PH among lowest ranked countries in internet speed, availability