Broadband in the Philippines to develop the country

In this blog we analyze the Philippines broadband evolution with Caroline Mariel E. Aquino and Dyan Gabrielle P. Dino. With 7,107 islands comprising the entire archipelago, the Philippines is slowly moving to become a more digitalized society. According to government data, 46% of Filipinos use internet on a daily basis while 48 million Filipinos actively engage in social media. Although these figures may seem moot as compared to other urbanized countries, the Philippines is a predominantly agricultural society that is slowly adapting to western ways and standards.   

 

The fragmented geography of the island, issues with the private telecommunication companies and political ties with outside nations are just some of the hindrances that have held back the development of broadband in the Philippines in the past. In order to address these issues, the government implemented the National Broadband Plan (NBP) that aims to invest and radically improve the telecommunication and broadband services in the Philippines.

One of the first telecommunication companies in the Philippines was PLDT Inc., formerly known as the Philippine Long Distance Telephone Company, which was founded in 1928. It is currently the leading and the largest telecommunications and digital services company in the country, and is the most known internet service provider. Its latest infrastructure uses a Domestic Fiber Optic Network (DFON) and has an approximate aggregated loop capacity of about 7 Tbps. Due to many areas being unreachable through the fixed terrestrial transport network, DFON was designed to be able to provide services to these remote places. In addition to this, PLDT Inc. is the only Philippine fiber optic network that includes international connectivity with countries such as the United States of America, Japan, and other Asian countries.

Furthermore, Digital Telecommunications Philippines Inc. (Digitel) is one of PLDT Inc.’s major subsidiaries. Being the third largest mobile telecommunications company in the Philippines, Digitel founded the Digitel Mobile Philippines, Inc. (DMPI) to assist in its wireless service. In March 2003, it launched their wireless service Sun Cellular which initially introduced unlimited call and text services throughout the Philippines but has now branched out into wireless broadband. It ranks as being one of the most affordable data plans in the country.

Though initially being a telecommunications provider, Smart Communications is now known to be a wireless communications and digital services subsidiary of PLDT Inc., with roughly 3.8 million subscribers for its broadband service alone. Smart Communications provides commercial wireless services through 2G up to 4G LTE networks. It is currently implementing LTE-A networks in some areas in the Philippines and is beginning research on creating a 5G service. It also is the main operator of TNT, also known as Talk ‘N Text, a cellular service best known for its low-cost packages made affordable for the masses in the Philippines.

Another major telecommunication service provider in the Philippines is Globe Telecom, the main competitor of PLDT Inc. and its subsidiaries. To compete with PLDT Inc.’s bandwidth cap on their broadband plans, Globe is best known for their “UNLI-plans” which allow subscribers to enjoy unlimited access to their wireless services on both broadband and mobile. Wireless mobile Wi-Fi, or more commonly known as “pocket Wi-Fi”, is also offered through Globe Tattoo, providing 4G and LTE network connection with speeds between 12 Mbps to 24 Mbps. Globe Telecom uses a Fiber Optic Backbone Network (FOBN) which spans a total of 12000 km and can be upgraded to about 100 Gbps per wavelength. It is configured in a ring and has a self-healing arrangement. With the thousands of islands that make up the country, the FOBN has the capability to connect the entire Philippines.

Touch Mobile (TM), which was launched in 2001, is one of Globe Telecom’s most valuable subsidiaries that provide cellular service, including mobile internet. Touch Mobile is best known for its “all network” data plan that allows subscribers to communicate with users on other local networks without any additional charges. It was first proposed to cater to the middle income market but, due to its highly affordable discounted call and messaging services, has now become one of the leading mobile providers in lower-income groups. Since this income bracket make up majority of the population in the Philippines, Touch Mobile is a profitable asset to Globe Telecom.

Apart from being a subsidiary of ABS-CBN Corporation, the Philippines’ largest entertainment and media conglomerate, Sky Cable Corporation (Sky) is the country’s largest cable television and pay television provider. In 2011, the telecommunications company expanded into providing a cable broadband internet service, SKY Broadband. A year later, it became the first internet service provider in the Philippines that offered ultra high-speed internet in selected residential areas with a download speed that reached 200 Mbps. Additionally, the company also provides mobile internet service, Sky Mobi, which is being powered by Globe Telecom, currently offering a download speed of 12 Mbps.

 

Although it seems as if telecommunication providers in the Philippines operate like a duopoly, with Globe Telecom and PLDT Inc. dominating the market, there are smaller companies that challenge the market share that these two companies hold. One of such companies is Converge ICT, a relatively new service provider in the market that aims to compete with the established networks. Converge ICT capitalizes on being a fiber only internet service provider, and it has more affordable services as compared to PLDT Inc. and Globe Telecom. However, like most small companies, the downside to Converge ICT is that it has the least wide established coverage area. Unlike Globe Telecom and PLDT Inc. who have invested throughout the years to continuously develop their broadband services, Converge ICT is attempting to more strongly develop their services alongside the peak of internet usage in the Philippines.

A commendable aspect about broadband providers in the Philippines, however, is their abundance, serving as a means for internet to be accessible to everyone in the country. In order to remain in contact with their families in the Philippines, overseas Filipino workers (OFWs) would call their relatives from abroad. However, as the cost for long distance calls increased throughout the years, other alternatives such as Facebook Messenger and FaceTime, alongside other internet applications became preferable. This, as a result, served to increase the need and demand for internet access in the Philippines. Moreover, in the past, the amount of computer shops, or more commonly known as “internet cafes”, drastically increased throughout the country. These served as a hub for people to be able to use the internet on a pay-per-use basis. But as the years progressed, telecommunication companies that provided a broadband service sought opportunity and decided to establish several data plans as cheaper alternatives to make a broadband connection more affordable to a wider range of potential subscribers from the different income brackets. As seen in the case of Smart Communications who subsidizes TNT, Smart Communications is known as the more costly broadband provider, while TNT is the more affordable alternative. The class stratification in the country has allowed several companies to branch out and capitalize on seemingly cheaper prepaid and postpaid plans and services.

These private owned companies, such as Globe Telecom and PLDT Inc., have controlled the telecommunication and broadband sector of the entire Philippines throughout the years. Thus, being private companies, it is only natural that they function with private interest in mind. Rather than prioritizing affordability and better service, the companies focus on profit and distribution. Moreover, the private telecommunication companies do not make enough revenue to invest in costly new technology just from the profit that they get from their subscribers. In comparison to other more developed countries such as Korea and Japan, whose broadband and telecommunication infrastructure has been invested on and developed by their own governments, the Philippines has lagged behind in this aspect. It was only in 2017 that the government decided to allocate funds to develop and create a National Broadband Plan (NBP) for the entire country. As stated by  Gamaliel Cordoba, commissioner of the National Telecommunications Commission (NTC), during the press release launch of the plan, “all governments know that if you put money in telecommunications infrastructure, any increase in speed results in an increase in GDP because of the effect in the economy.” Following the footsteps of more developed countries who have laid down the groundwork for national connectivity,  the Philippines aims to fully digitalize the country by ensuring that most businesses and households operate on fiber optic cables. By providing cheaper and faster internet service both in big cities and remote provinces, the government hopes that it improves the overall standing of the socio economic sector of  the Philippines.

 

Compared to the other countries part of the Association of South East Asian Nations (ASEAN), the Philippines lags behind when it comes to the affordability and speed of internet and broadband services. Despite the many innovations in technology that have been made all over the world, the Philippines is considered to have the slowest average internet speed in the Asia Pacific. As seen in the figures released by the Philippine government below, the Philippines does not meet the standard that is needed to participate in a more competitive market in today’s digital society. The NBP was created as part of the ASEAN ICT Masterplan 2020 program which safeguards the continuous development and improvement of the quality of life of all ASEAN countries. 

The connectivity of a country does not only influence the socio-cultural development of the nation, but it also enables its total economic growth. By ensuring that all government offices, schools, hospitals enterprises have access to steady and fast internet, the government hopes that this provides a venue for more market activity and innovation. According to Elsio Rio, the secretary of the Philippine Department of Information and Communications Technology (DICT), “The NBP vision is to establish broadband as a basic right for all consumers, businesses, and government. We want more and accelerated investments and we seek to engage the public and private sector, including those from unserved and underserved areas,”. Much like China, whose GDP significantly increased when they fully invested in their nation’s internet economy, the Philippines hopes that the NBP is the first step in building a fully digitalized nation.

 

The country that serves as the benchmark for all ASEAN nations when it comes to internet and broadband connectivity is Singapore. Singapore, under the program name Singapore One, adapted the public-private-partnership model which entails private telecommunication companies to work hand in hand with the government to ensure a unified broadband plan for the entire nation. In line with this, the Philippines aims to develop a similar telecommunications model that merges the private and public sector to create a more efficient and connected broadband society. 

All this said, although the Philippines may not be the most technologically advanced country, the government is taking proper action to progress the nation’s connectivity. Through programs such as the NBP and other efforts of private companies, the path is paved for the continuous development and investment of telecommunication and broadband infrastructure that is essential to any digital nation. Although there may be a long way to go until the Philippines is up to par with first world modernized nations, at least there are already established plans of action that makes this all seem possible. 

We analyze international broadband evolution (here, the case of Philippines) in this blog, in Research Group about Digital Journalism and Marketing and Broadband and in Research Group on Innovative Monetization Systems of Digital Journalism, Marketing and Tourism (SIMPED), from CECABLE,  Escola Universitària Mediterrani of UdG, UPF and Blanquerna-URL, in Twitter (@CECABLEresearch), Google+, in the group of LinkedIn, in the page of LinkedIn, in the group of Facebook, in Instagram (CECABLE), in Pinterest and in this blog. We will go in deep in the XXIII Cable and Broadband Catalonia Congress (10-11 April 2018, Barcelona).