Wednesday, August 10, 2022
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European telco operators eye entering the Philippine market

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MANILA, PHILIPPINES – European telco operators are eyeing the Philippine market after Congress passed a measure that allows full foreign ownership of the industry.

In a report by GMA News, the European Chamber of Commerce of the Philippines (ECCP) stated Friday that several European telecoms corporations are considering expanding into the Philippines after Congress enacted legislation allowing 100% ownership in the industry and other public utilities.

During the virtual launch of the Doing Business in the Philippines 2022 report, ECCP president Lars Wittig stated that the approval of the law altering the 85-year-old Public Service Act (PSA) is a “absolute massive game-changer and it will create double-digits, billion dollar investments.”

The measure defines “public utility” as the following: electricity distribution and transmission systems; petroleum and petroleum product pipeline transmission systems; water pipeline distribution systems and wastewater pipeline systems, including sewerage pipeline systems; seaports; and public utility vehicles.

All other industries that are not included will continue to be public services and will be liberalized or open to 100% foreign ownership.

With this, Wittig stated that European telcos that have expressed interest in the 2018 bidding for the country’s third major telecommunications player “can go back and go for the 51%, 99%, or 100% ownership.” The ECCP chief also stated that the 40% ownership limit on public utilities will be lifted, making it easier for European telcos to enter the country.

“We know who they are. We know they’re very keen,” Wittig said. “There are interests and potential investors, absolutely. The most obvious to refer to is telco.”

Norwegian telco Telenor, Austria-based Mobiltel, and the United Kingdom’s Vodafone have all shown an interest in participating in the third telco bid. However, the winner was the China Telecom-backed and Udenna-led DITO Telecommunity, formerly known as the Mislatel consortium.

Maurizio Cellini, first counselor and head of Trade and Economic Affairs at the European Union Delegation to the Philippines, also stressed the importance of mobilizing international investors given the country’s potential as a fast-growing economy.

“From an investment angle, the European Union continues to see the Philippines as a large, fast-growing market. However, the Philippines does not succeed in mobilizing European traders and investors in line with its size and potential,” Cellini said.

The bill is awaiting the signature of President Rodrigo Duterte.

According to the Organization for Economic Cooperation and Development (OECD) 2020 data on FDI Restrictiveness, the Philippines remains among the most restrictive, ranking 81st out of 83 countries.

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