China Telecom, local tycoon’s joint bid poised to win Philippine telco license

Two other bids were rejected due to technical reasons. (File/AFP)
Updated 07 November 2018
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China Telecom, local tycoon’s joint bid poised to win Philippine telco license

  • Duterte had repeatedly expressed a preference for a Chinese telecoms firm to enter the Philippines
  • There were only two rival bids to Mislatel’s, from local companies, but both were rejected by the telecoms regulator for being incomplete

MANILA: A consortium of China Telecom and firms controlled by a Filipino tycoon appeared poised on Wednesday to win the Philippines’ third telecoms license, after two rival bids were rejected and foreign players tipped to participate opted out.
State-controlled China Telecom joined businessman Dennis Uy, whose interests include real estate, energy, shipping and logistics, under a consortium called Mislatel, hoping to win the right to challenge existing players Globe Telecom and rival PLDT.
The third license, which could be awarded by year-end, comes at the behest of Philippine President Rodrigo Duterte and aims to boost the country’s notoriously patchy services and end a domestic duopoly long accused of being uncompetitive.
Duterte, who has made strong business ties with China his top foreign policy priority, had repeatedly expressed a preference for a Chinese telecoms firm to enter the Philippines, and even verbally “offered” the license to Chinese Premier Li Keqiang.
Uy’s ties to the president are well known and he was a contributor to his 2016 election campaign, hailing from Davao, the city where Duterte was mayor for 22 years.
South Korea’s KT Corp. issued a statement with Philippine firm Converge ICT confirming they had decided against bidding, while Vietnam’s Viettel, which in August confirmed its interest in the Philippines, said it would not contest.
Norway’s Telenor had bought bid documents but did not enter the contest.
There were only two rival bids to Mislatel’s, from local companies, but both were rejected by the telecoms regulator for being incomplete.
The two disqualified bids were from Philippine Telegraph & Telephone Corp. and a consortium of TierOne and LCS Group. Both bidders said they would appeal the regulator’s decision.
Foreign firms are required by law to join a consortium due to a 40 percent ownership cap in a local telecoms outfit, which experts say has limited competitiveness in a sector worth about $5 billion a year in revenue.

Lucrative market
Analysts see the Philippines and its 105 million people as a potential growth market due to its thriving business process outsourcing sector and its underdeveloped mobile and fixed-line services, which consumer groups have complained are unreliable and expensive.
Both Globe and PLDT’s mobile unit, Smart, say they have been investing big in boosting network coverage — $950 million and $1 billion respectively this year — but are constrained by weak regulations that make acquiring permits for building infrastructure a painstakingly slow and complex process.
Telecoms Minister Elizeo Rio recently told Reuters moves are underway to streamline that, introduce tower-sharing requirements and eventually, raise foreign ownership caps.
A Viettel source told Reuters the time was “not appropriate” to bid, while KT Corp. and Converge said the Philippine market and industry outlook were financially viable, but “conditions imposed for participation render the venture commercially unviable.”
Aristoteles Elvina, a special assistant to the head of Converge, said there was no point bidding against a company owned by the Chinese government, or getting a license that demands a new entrant commits to things operators Globe and Smart were not required to do.
“We don’t feel it is a level playing field,” he told reporters.
“The existing players right now were not asked to do what we’re being asked. Like we have to put up speed, coverage.”
The Mislatel consortium includes three companies, China Telecom, and two of Uy’s firms, Udenna Corporation, a holding company, and Chelsea Logistics Holdings, one of its units.
Chelsea’s shares were up 35 percent on Wednesday afternoon after news that Mislatel’s was the lone qualified bid.


US-China trade deal hopes grow as oil prices decline

Updated 19 June 2019
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US-China trade deal hopes grow as oil prices decline

  • Data suggested a smaller-than-expected fall in American crude inventories
  • Preparations underway for Donald Trump to meet Xi Jinping next week at the G20 summit in Osaka

LONDON: Oil prices declined on Wednesday as data suggested a smaller-than-expected fall in American crude inventories, as hopes for a US-China trade deal continue to grow.
Brent crude futures were down 51 cents at $61.72 a barrel.
US West Texas Intermediate crude fell 25 cents to $53.65 a barrel. On Tuesday, it had recorded its biggest daily rise since early January.
After weeks of swelling, US crude stocks fell by 812,000 barrels last week to 482 million, the American Petroleum Institute said on Tuesday, a smaller fall than the 1.1-million-barrel drop analysts had expected.
Official estimates on US crude stockpiles from the US government’s Energy Information Administration are due during afternoon trading.
US President Donald Trump offered some support, saying preparations were underway for him to meet Chinese President Xi Jinping next week at the G20 summit in Osaka, Japan, amid hopes a trade deal could be thrashed out between the two powers. Trump has repeatedly threatened China with tariffs since winning office in 2016.
European Central Bank President Mario Draghi also offered a boost, saying on Tuesday that he would ease policy again if inflation failed to accelerate.
Tensions remain high in the Middle East after last week’s tanker attacks. Fears of a confrontation between Iran and the US have mounted, with Washington blaming Tehran, which has denied any role.
Trump said he was prepared to take military action to stop Iran having a nuclear bomb but left open whether he would approve the use of force to protect Gulf oil supplies.
On Wednesday, oil markets shrugged off a rocket attack on a site in southern Iraq used by foreign oil companies.
“It is interesting to note that the crude oil futures market could not rally on hawks planting bombs in the Strait of Hormuz but could rally on doves planting quantitative easing,” Petromatrix’s Olivier Jakob said in a note.
“This is an oil market that doesn’t know how to react when an oil tanker blows up but knows how to react when the head of a central bank makes some noise.”
Members of the Organization of the Petroleum Exporting Countries have agreed to meet on July 1, followed by a meeting with non-OPEC allies on July 2, after weeks of wrangling over dates.
OPEC and its allies will discuss whether to extend a deal on cutting 1.2 million barrels per day of production that runs out this month.