Within the past two weeks, two shareholders in the Philippines’ new market entrant DITO Telecommunity have “withdrawn funds” from the venture, reports The Manila Standard.
The newspaper noted that towards the end of June this year, Eliseo Rio Jr. – the former undersecretary of the Department of ICT (DICT) – divested 1.2 million shares in DITO. While he still holds 2.3 million shares in the unit, his withdrawal had a value of PHP44.4 million.
Singapore’s Accion fund published an ownership report on 14th July showing that it had divested its entire 30% stake in Dito CME Holdings, reported local outlet Bilyonaryo.com.ph. Accion originally acquired 842 million shares in the holding firm, owned by businessman Dennis Uy, in August 2018.
At that time, share prices in DITO – formerly Mislatel – were booming as it was on the cusp of being named as the Philippines’ third major operator by DICT and the National Telecommunications Commission (NTC). Accion paid PHP1.22 billion (US$24.7 million) for the stake. Like Rio, the fund provided no statement clarifying its reasons for the divestment.
The Philippines’ mobile sector has long been a duopoly between PLDT (Smart Communications) and Globe Telecom. In November 2018, the Mislatel consortium – which went on to rebrand as DITO – was granted a franchise valid up to 2023 to provide telecom services, in a bid to inject new blood into the sector.
However, as noted in TeleGeography, the operator has met with difficulty as it targets a commercial launch in March 2021. The ongoing pandemic has resulted in network build-out delays, with the firm’s Chief Administrative Officer Adel Tamano confirming that DITO would be unable to complete its technical launch a week before the original deadline.
Tamano admitted that DITO had fallen short of its first-year cell site construction requirements by 75%, although it was granted a six-month reprieve in order to carry out a technical audit, with the government acknowledging that the Covid-19 pandemic was a major factor in the delay.