News Analysis Telecoms

Efforts to connect with the public

A flurry of announcements, promotions and corporate PR by the Philippines’ Big 2 telco providers recently, suggests that the duopoly are setting out their case to the incoming administration, and the public, that the country’s telecommunications sector is not in need of foreign intervention. They come on the heels of a warning from President Duterte that he is considering making the Internet public policy and that unless the current providers improve the speed and quality of access – particularly in the country’s 79 provinces outside the National Capital Region of Metro Manila – he will open the sector up to foreign competition.

Globe Telecom (GT), announced that it is to launch a US$1 billion nationwide network-modernisation programme aimed at improving Internet access, with faster download and upload speeds, to 20,000 barangays – about 2 million home. It will connect these areas to the web with optical-fiber cable and this year’s US$750 million worth of allotted capital expenditure will go toward the cost. Implementation is expected to take five years. Announcing the programme, Globe president and CEO, Ernest Cu, said that success will require cooperation from the government and homeowners’ associations.

In tandem, Globe Business, GT’s business-solutions arm, announced that it is “ushering in uninterrupted” data and digital services, employing the latest information and communications technology (ICT) capabilities and innovations, across Philippine enterprises. Business has been among the most vocal critics of the country’s connectivity and has made repeated overtures to government to get something done, contending that it is costing their businesses and the economy as a whole billions of dollars in revenue, annually.

Philippine Long Distance Telephone (PLDT) had earlier announced that the group would be investing US$538 million on the network integration of its two mobile units, Smart and Sun Cellular, and on network upgrades for its 3G and Long Term Evolution (LTE) network in an effort to increase mobile coverage. This will account for more than half of the US$926 million which the company has earmarked for its 2016 capital-expenditure programme. The plan is to double its coverage of LTE. Smart recently deployed its LTE-Advance mobile service with significantly higher data speeds than previous LTE packages, paving the way for a 4G mobile network with greater area coverage.

Welcome developments all, but in a region where every country is ploughing its resources into improving connectivity through 4G networks, for everything from personal use to e-commerce and the logistics of transacting business, and as South Korea gets close to introducing a 5G mobile network, the public must wonder whether its two giant telco corporations are financially committed to making the Philippines Internet competitive. Presently, in an Asia context, the country’s LTE capability in terms of area coverage and download speed is lagging.

LTE national coverage: South Korea 97%; Japan 90%; Hong Kong, 86%; Singapore 84%; China 76%; Taiwan 73%; Thailand 54%; Malaysia 48%; Indonesia 43%; Philippines 39%. LTE download speed (Mbps): Singapore 33; South Korea, 29; Taiwan 18; Japan 14; China 14; Malaysia 12; Hong Kong 11; Indonesia 9; Thailand 8; Philippines 8;

One thing we are quite confident about is that Duterte and his secretary at the Department of Information and Communications Technology (DICT) will require more than window-dressing by the Big 2 if the telecom giants are remain at the top of the Philippine’s telco food chain. They will be expected to provide copper-bottom guarantees – possibly penalty-linked – for a detailed list of prioritised works with scheduled completion dates. The new administration is keen to get connectivity on track and very quickly.