Philippines' Duterte threatens PLDT, Globe with expropriation

Philippines' Duterte warns of 'expropriation' if telcos don't improve services.

Robert Clark, Contributing Editor, Special to Light Reading

July 28, 2020

2 Min Read
Philippines' Duterte threatens PLDT, Globe with expropriation

In yet another sign of the growing politicization of telecoms, Philippines President Rodrigo Duterte has threatened the two incumbent telcos with expropriation.

Speaking at the annual state of the nation address Monday, the populist leader put PLDT and Globe Telecom on notice if they don't improve service levels by December.

"If you are not ready to improve, I might just as well close all of you and revert back to the [fixed-]line telephone," he said in his address.

"I will take that and expropriate it for the government."

The threat might be vague, but Duterte's record shows it shouldn't be taken lightly.

Investors certainly aren't taking it lightly. The stock prices of PLDT and Globe both dropped in early morning trading in Manila.

Four years ago, Duterte threatened to "go to China" if the operators didn't get better – which is what he did. He struck a deal with President Xi Jinping, awarding China Telecom a license in partnership with businessman Dennis Uy under the brand Dito Telecommunity.

Earlier this year Duterte terminated the license of 67-year-old TV network ABS-CBN, another favorite target of his (the network continues to broadcast on a temporary license).

Like the owners of PLDT and Globe, ABS-CBN are among the handful of wealthy families that dominate the Philippines economy.

Calling on the Globe and PLDT to "improve the services before December," Duterte added that if it's just a question of capitalization or cash, they should "look for it."

As it happens, the duo are among the most profitable operators in the region, with EBITDA margins of above 50%, which is ten percentage points above most other telcos.

China Telecom's partner Uy is not one of the oligarchs but is a friend of Duterte from the south.

In contrast to the big two operators, his companies have enjoyed a stock market pop in the wake of Duterte's speech.

But Dito has its own troubles because of the $5 billion cost of the rollout and the difficulty in site acquisition.

It has missed multiple rollout targets, although chief administrative officer Adel Tamano said yesterday it was on track to meet its current start date of March 2021.

In response to Duterte, Globe Telecom acknowledged the need to improve service, citing its $1.2 billion capex program this year.

But it also highlighted the "long drawn permitting process" that has "hampered cellsite builds and laying down of fiber to homes."

PLDT has made no comment.

— Robert Clark, contributing editor, special to Light Reading

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About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech ( 

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