New Philippines operator to be blocked from selling to Globe or PLDT

KDDI, LG Uplus and an unidentified Taiwanese company are all competing with China Telecom for the right to build the third mobile operator in the Philippines.

The Philippines government has insisted that the successful bidder – which will have a minority stake in a locally owned company – will not be able to sell out to existing operators, Globe and PLDT.

However, KDDI has denied reports from the Philippines presidential office that it is one of the bidders. And opposition politicians have warned against the involvement of China Telecom, warning that it could be a Trojan Horse that would give China access to state secrets.

The news that the third licensee would be prevented from selling out to Globe or PLDT came in a radio interview with President Rodrigo Duterte’s communications secretary, Martin Andanar.

A clause will be inserted into the contract, said Andanar. “That is the beauty of the new agreement with the third player as there is such a clause there.”

Duterte is known to prefer a Chinese partner: he asked the Chinese government to pick a preferred operator and China Telecom was named. The winning operator will be expected to spend up to $10 billion on the new infrastructure.

Meanwhile Globe has said it is spending $850 million to upgrade its network to prepare for the competition and PLDT will spend $1 billion.

Fixed-line operator Philippine Telegraph & Telephone (PTT) has been named as a likely local partner for the project.

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