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Philippine Telecom hires US company to allay fears of spying on China

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MANILA – The Philippine subsidiary of China Telecom has registered the US company Fortinet as a key cyber security partner in an effort to allay fears about possible spying from Beijing.

Dito Telecommunity, a joint venture between state-owned China Telecom and Davao’s tycoon Dennis Uy, a campaign donor to President Rodrigo Duterte, is building his network after winning a bid in 2018 to become the third largest telecom player in the country .

But Philippine Defense Secretary Delfin Lorenzana’s recent statement that he had allowed Dito to build mobile towers inside military camps renewed fears of espionage from China. Manila and Beijing remain locked in a bitter territorial dispute in the South China Sea, even though Duterte has turned to China for investment, including that of China Telecom.

At an online news conference Thursday, Dito Chief Executive Officer Adel Tamano stressed that Dito is controlled and managed by the Philippines, with China Telecom owning 40% and Uy Group 60%.

“If this agreement passes the cluster of the Philippine Armed Forces, the Department of National Defense and the National Security Adviser, I think we should have confidence that this agreement will not be a tool for espionage,” Tamano said. “We take cyber security and espionage seriously and will not allow it [to happen]”

Opposition Senator Risa Hontiveros has called for an investigation into the deal between the Philippine military and Dito, citing Chinese laws that force indoor units to assist the government in gathering intelligence. “There is also the Chinese Anti-Espionage Act that Chinese corporations cannot refuse to help their government in this regard,” Hontiveros said.

Tamano said Dito’s loyalty is with the Philippines. “As part of the management, I can not imagine saying, ‘We approve of espionage, we approve of receiving classified information,'” Tamano said. “We will go to jail.”

The Dito network infrastructure is provided by Chinese companies including Huawei Technologies and ZTE, which are also suppliers to the Philippines’s two main existing players – PLDT, backed by Japan’s NTT Group and Globe Telecom, a Singapore Telecommunications unit.

To allay fears of espionage, Dito, who last month received congressional approval for a new 25-year franchise, has registered the services of the American company Fortinet as part of a billion pesos ($ 20 million) security operations center cybersecurity.

“If you do not trust Chinese equipment, you may trust US cyber security solutions,” said Dito’s Chief Technology Officer Rodolfo Santiago, a retired general.

California-based Fortunes is founded and run by Ken Xie, a cyber security expert educated at Stanford University. He has contracts with major American companies.

Santiago said Dito has not yet built towers in military camps. The company has so far built over 800 towers out of the 1,300 required to meet its commitment to provide coverage for 37% of the population. It plans to spend 27 billion pesos next year to expand its network and build 5G infrastructure.

The company lost a key technical audit in July due to pandemic-related blockages that delayed the construction of its network, but it remains on track for its commercial launch in March 2021, officials said.



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