PT&T seeks Chinese partners to challenge duopoly

By:
Natalie Bannerman
Published on:

PT&T is in talks with Chinese telecoms firms about forming a strategic partnership before the end of 2017

Philippine Telegraph & Telephone Corp (PT&T) has said it will partner with Chinese companies to challenge the two main telecoms players.

As reported by Reuters, PT&T chairman Salvador Zamora confirmed that PT&T is talking to eight companies about forming strategic partnerships and is set to sign a deal before the end of the year.

“We will not just be content to be the third telco. We want to be second, and then perhaps even first, if we are able to satisfy our customers,” said Zamora in an interview with Reuters.

PT&T is currently a niche player that sits behind PLDT and Globe who have a duopoly of the market, it hopes that this pending partnership will turn it into a domestic force.

The news comes days after Philippines’ president Rodrigo Duterte announced plans to give China the opportunity to create and run a third telecoms carrier in the country. The move was announced as Duterte also attempts to break the duopoly in the market place and was previously quoted as saying that opening up the telecoms sector in the country would "promote competitiveness and improve quality of service". In October of this year he affirmed this sentiment by indicating that foreign carriers may be welcomed to the market.

Commenting the deal Winthrop Yu, chairman of the Internet Society Philippines, said: “PT&T’s rejuvenation will certainly benefit from a partner that can bring in both capital, as well as technology and operational know-how. As we like to say ‘the more the merrier’ and ‘better sooner than later.”

Zamora is a keen supporter of Duterte’s decision calling it a “godsend” and that Chinese companies would not survive alone in the Philippines and would need to partner with a local company.

The government’s 40% cap on foreign investment ownership has, so far, kept the investment from multinational firms at bay in a market that has over 100 million people. Through the new partnership PT&T hope to expand its broadband offering and launch mobile operations in the next few years.

Zamora said PT&T expects to sign a deal by 15 December with ZhongXing TianTong Technology Co Ltd to offer broadband services, and wants foreign partners to provide expertise, infrastructure and capital for internet expansion and mobile services.

“The Zamoras are adept at getting into partnerships with foreign companies in their other business ventures. This should give them an advantage, given their track record,” added Mary Grace Santos, lead convenor of the Better Broadband Alliance.

It is believed that Duterte’s administrator is seeking to set up a national broadband network and boost internet penetration and bandwidth in a country that has some of the slowest internet speeds in Asia-Pacific.

“The market is so vast here. It seems the competitors, the duopoly, they are not at all customer-oriented. Even the president complains about them. Everybody complains about them but still they continue their poor service,” concluded Zamora.