Military allows Chinese-backed third telco to build facilities in camps

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Metro Manila (CNN Philippines, September 11) — The Armed Forces of the Philippines (AFP) has allowed the country’s third telecommunications company, backed by state-owned China Telecom, to build communications equipment in its camps.

The AFP and Mindanao Islamic Telephone Company, now known as Dito Telecommunity, inked a memorandum of agreement that would allow it to build communications facilities in military camps and installations.

Under the agreement, the AFP will choose the locations where Dito can install and manage its communication sites “without undermining the operations of affected AFP units.”

The deal also states that Dito “guarantees that the devices, equipment, and/or structures installed at the site provided by the AFP shall not be used to obtain classified information.”

Both the military and Dito assured that the agreement will not jeopardize the country's security, as both sides claim protocols are in place to protect the country's communications.

“We have been partnering of course with Globe, with Smart, and sabi nga ito, this is the same partnership we are doing with Mislatel who won the third telco. It's only fair na ibigay din namin the same services na binibigay namin sa ibang kumpanya," AFP Chief of Staff General Benjamin Madrigal Jr. said.

[Translation: We have been partnering, of course, with Globe, with Smart, and as we've said, this is the same partnership we are doing with Mislatel who won the bid to become the country's third telco. It's only fair that we give them the same services that we are giving to other companies.]

Dito spokesperson Atty. Adel Tamano said their company's own security plans have been submitted to the National Telecommunications Commission.

There have been no discussions as to who will man the facilities, but Tamano said they will respect the AFP's rule barring foreign nationals from enterring camps.

The AFP will determine the rent value of these locations where Dito would build its facilities. It said Dito will pay this by providing the military with communications, electronics and information systems equipment, and training equivalent to the monetary value of the lease.

The telco is also required to provide all equipment, labor and materials necessary for the operation of its facilities and to shoulder all expenses related to it.

Dito got a permit to operate as the country’s third telco in July. The government hopes that the entry of new players in the telco industry would break up the Globe-Smart duopoly and improve services in the country.

Information and Communication Technology Secretary Gringo Honasan said Dito's entry will increase internet speed in the country from 3.5 megabytes per second (mbps) to 15 to 20 mbps in the first quarter of 2020.

Dito said it plans to cover 84 percent of the country with 5G network technology in five years.

READ: Dito's entry may hurt 40% of PLDT revenues, credit rater says

Congress approved in February the transfer of ownership of Dito, then known as Mislatel, to a consortium composed of Davao-based businessman Dennis Uy’s Udenna Corporation, Udenna's subsidiary Chelsea Logistics Holdings and China Telecom.

Under the House resolution adopted by the Senate, Mislatel's ownership structure will be: 35 percent to Udenna, 25 percent to Chelsea Logistics, and 40 percent to China Telecom. China Telecom's role in the Dito consortium is to build and deploy network infrastructure and to manage technical requirements of the Dito network.

Defense officials have earlier raised alarm about the presence of Philippine offshore gaming operators — which largely employ Chinese nationals — near military camps, calling them a potential security concern.

CNN Philippines' David Santos and Joyce Ilas contributed to this report.