The next revolution (2)

(Conclusion)

In Rwanda the government put in place under a public-private partnership a national broadband network that linked all schools in the country, allowing them to become local hubs that serviced homes, businesses, government offices, etc. in the community by fiber, copper, or wireless. Children could have immediate access.

It’s a great idea. It gives schools an importance they deserve. The Rwandan government created an enabling environment by liberalizing the Information and Communication Technology (ICT) sector and laying fiber optic cable across the country.

Which makes our Department of Education’s idea of “a book for every child” so outdated that it’s amazing it’s still there. One book (a not very good book at that)? A laptop for every child is the ever so obvious goal. A laptop has a thousand books; it opens a child to the world. Kids today don’t need books; babies have iPads almost at birth. I was told one company can offer them in bulk for $100 each. Maybe companies should be allowed to donate laptops, with their name on each. I’m sure some would for the advertising gain.

In fact, as I’ve long been lobbying for, there is a free source: call centers, which replace computers every two years. Those still usable computers can be donated to schools, but then the companies have to pay tax. You shouldn’t be made to pay to donate something. That’s crazy. Finance Secretary Carlos Dominguez has promised to do something about it.

Once the kids get their laptops, what do they learn? With due respect to my many friends in the legal profession, it’s not just law. We need to promote the glamour of engineering, too. Cybersecurity, hacking, etc. needs lawyers. But computer systems, IT systems, need engineers. And they are needed in the provinces to which ICT companies are moving.

There’s much complaint about the high cost and slow speed of internet services from the two telcos. But services are improving quite rapidly, although reality says don’t expect too much—unless you’re prepared to pay. In Singapore, internet users average a monthly spend of $52. Philippine users spend a miserable $2. It’s all they can afford—but you can’t invest in hugely expensive systems on $2. You can on $52. You get what you pay for.

Globe and Smart spend 32 percent of their revenues on capital equipment. The Singapore telco needs to spend only 10 percent (because revenues are comparatively so much higher). Globe and Smart aren’t ripping off the consumer, contrary to complaints. Look at their financials: They’re making no great profits or returns on investment. It’s pretty much in the middle among industries.

They’re in a business where rapid change means very limited time to recover capex costs, where an archipelagic geography means higher costs, where services are increasingly free (paid-for SMS is being replaced by no-cost Viber, for example), where per person spend is low. It’s a tough business.

What I particularly like about the growth of ICT is that it is slowing, even reversing, the migration to cities. You can now do business in remote areas. You can establish call centers, data centers and IT businesses in other towns and cities. Decentralization is happening. Manila, Cebu and Davao are no longer the only places; other cities are successfully hosting IT companies.

But better broadband is needed. Satellite can help, too—if we had it. We don’t, but we will. It’s inevitable. That will ease the pressure on installing cable.

Finally, the Department of ICT can’t do it all alone. This new revolution needs all involved if the Philippines is to be the leader it can be. The Department of Energy to assure 24/7 power, essential in a call center business. The DepEd to provide curricula that meet the ICT industry’s need, the Department of Science and Technology particularly so. The Office of the President, Congress, Department of Budget and Management and Department of Finance to give the DICT the high levels of money it needs. The Department of Public Works and Highways to coordinate on the laying of underground cables. The Department of Trade and Industry/Board of Investments to help promote and grow the industry; the Philippine Economic Zone Authority to provide sites and approve businesses. Let’s not forget local governments, village associations, etc. All need to cooperate to make Philippine ICT a world leader.

E-mail: wallace_likeitis@wbf.ph. Read my previous columns: www.wallacebusinessforum.com