Start probe on Dito Telco-AFP deal, Senate panel pressed

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    Sen. Risa Hontiveros yesterday pressed the Senate committee on national defense to open its inquiry into the deal between the Armed Forces and Dito Telecommunity Corp. to set up cellsites in military camps nationwide after an Australia-based consulting firm aired concerns on the agreement which it said poses a threat to the country’s national security.

    Hontiveros said she filed Senate Resolution 137 on September 2019 and fears it is gathering dust as the Senate panel, which is chaired by Sen. Panfilo Lacson, has yet to act on it.

    “Time and again I have raised concerns regarding China-owned Dito Telco’s intrusion in the country. The revelations of CreatorTech’s new study are not surprising given that many of our own experts have already flagged national security issues,” Hontiveros said.

    CreatorTech released late last month a study raising serious concerns on the country’s national security after the AFP gave Dito Telecoms the green light to build cell sites in its camps all over the country.

    The concern stems from the fact that ChinaTel, which is 100 percent owned by the government of China, has a 40 percent stake in Dito Telco.

    “ChinaTel reports directly to the Chinese Ministry of Industry and Information Technology, and that ChinaTel has close ties with China’s Armed Forces,” she said, stressing that the Senate must not ignore “these blatant red flags” since it is the country’s interest and security which are at stake.

    “This fact alone is alarming enough, especially at a time when China continues her adventurism in contested territories in the West Philippine Sea. This (Dito Telco) is a proxy of a Chinese regime intent on pushing its weight around and imposing its will upon the region,” she said.

    Aside from the security threat posed by the Chinese government’s control over Dito Telco, the CreatorTech study also questioned the company’s ability to raise enough capital to fund the venture, noting that it still needs $2.5 billion in addition to the $500 million already drawn down from its Bank of China credit facility to meet its commitment of $3 billion spending on its first year.

    “Given the current balance sheet, this $2.5 billion would not come from equity. The only other source is debt. The sole lender is the Bank of China. Commercially, it is unlikely that the Bank of China on its own would extend the total amount,” said Steve Mackay, author of the CreatorTech report titled “A Study Into the Proposed New Telecommunications Operator in the Philippines: Critical Success Factors and Likely Risks.”