By Beting Laygo Dolor i Contributing Editor

The entry of a third telecommunications company in the Philippine market took another step forward last week with the signing of a US$5.4 billion supply contract in Beijing, where President Rodrigo Duterte attended China’s “Belt and Road Forum for International Cooperation.”

The Udenna Corporation and Chelsea Logistics Holdings Corp., two companies owned by business magnate Dennis Uy, signed the pact with state-controlled China Telecommunications (China Tel) last April 25.

The contract was signed by Uy and China Telecom Chairman Ke Ruiwen, and was witnessed by business leaders from China, the Philippines and other Asian countries.

Officially, the third telco that will challenge the market duopoly of Globe Telecoms and PLDT/Smart is Mindanao Islamic Telephone Company (Mislatel), also owned by Uy who forged a partnership with China Tel after being awarded the Congressional franchise earlier this year.

Udenna, Chelsea and China Tel are the principal stockholders of Mislatel. The trio previously announced the US$5.4 billion (PHP 279 billion) investment after all the roadblocks to the awarding of the franchise were cleared.

“This is a historic occasion,” Uy said during the contract signing, adding, “This is another step forward in realizing Udenna’s vision to improve the lives of Filipinos.”

He also said that his investments were not only for short-term profit but for the long-term.

The forum in China was attended by leaders from 37 countries including the Philippines’ Duterte, making it bigger than the first forum held in 2017 which was attended by 29 nations.

Hosted by Chinese President Xi Jinping, the forum has met with criticism from the US and its allies which accuse the growing Asian military and economic superpower of using loans to entrap developing countries.

The Philippines under Duterte has been using massive loans from China to fund the administration’s ambitious “Build Build Build” infrastructure program. The private sector has also sought loans from China, with Mislatel being one of the most visible.

It should be noted that taipan John Gokongwei tried but failed to become the Philippines’ third telco, Sun Cellular, which he eventually sold to PLDT/Smart.

Despite his lack of experience in the industry, Uy said he was confident he would succeed in the highly competitive telco world where profits of the two exiting players are in the billions of pesos every year.

For its part, China Tel – reportedly the third biggest telco in China — said in a statement that the partnership promotes collaboration by “advancing the availability of new and emerging technologies.”

Mislatel earlier announced that it would become operational in Metro Manila by the beginning of the last quarter of 2019, with a nationwide roll-out to follow in 2020. The company also vowed to provide substantially faster speeds than its two competitors.

Mindanao-based Uy, a longtime friend of Duterte, won the franchise over Philippine Telegraph and Telephone Corp. (PT&T) as well as businessman-politician Chavit Singson’s Sear Consortium.

For a while, Mislatel’s original franchise was considered revoked after the company failed to operate within one year after being granted a franchise. But the change of its ownership structure and the continuation of its franchise easily passed through the House of Representatives, before meeting some resistance in the Senate.

Duterte promised Filipino consumers that a third telco would be in place last year due to mounting complaints against the supposed erratic service provided by Globe and PLDT/Smart but the process of picking a third telco faced numerous delays, before finally being settled in November, last year.