May we clarify the concerns raised by Mac Yanto, Computer Professionals’ Union deputy secretary general, in his letter titled “National broadband only way to break telco duopoly” (Opinion, 6/27/16).
Yanto claims: “…the joint acquisition of the SMC telecom assets will wipe out any aspiring competition—regardless if the newcomer has bottomless capital.” This claim is erroneous.
One of the conditions laid down by the National Telecommunications Commission, prior to its approval of the co-use of frequencies among the various telcos, is the return of a complete set of spectrum assets covering 2G, 3G, 4G and potential 5G frequencies. Included in the set of returned frequencies is a total of 20 megahertz of the 700 Mhz bandwidth. The return of the frequencies to the government will in fact enable a future player who may want to enter the Philippine market. As to whether that player carries bottomless capital, any businessman would argue that in business, there is no such thing as infinite resources, and this includes capital.
Yanto refers to the acquisition as a way forward for industry players to expand “their slowest internet speed offering to areas previously not reached.” The problem of slow internet speed in the country, especially for “fixed internet” (wireline, DSL broadband), lies on the lack of cell sites (the Philippines has very low cell site density vis-à-vis internet population) and the lack of spectrum—both of which are needed for capacity and coverage. For mobile internet, our speed is quite decent and comparable with other countries based on “open signal” results.
On the other hand, the collective years of underinvestments in the area of fixed internet has put the country in its present challenged condition. Realistically, this is where the industry is on catch-up mode. The Akamai study cited by many interest groups, including government, is reflective of fixed internet speeds only.
Yanto talked about the views of industry players on the role of government, which he referred to as “the contrasting positions” that are “a duopoly deception.” We take exception to this view. For years, Globe has been advocating for government to play a role in improving the internet superhighway in the country. The internet should be looked upon as a data superhighway where business, communications and service transactions thrive. If the government can invest in roads linking farms and market or for transport convenience, why not in the virtual highway?
This “issue” of duopoly is a result of business survival.
The telecommunications sector in the Philippines began with a monopoly. This was deregulated during the Ramos administration. With the deregulation, many players entered the industry; unfortunately very few survived. If business survival is wrong, then what in Yanto’s mind is good?
Globe spends about $700 million annually on network improvements for better customer experience. In fact, the Philippine telco industry spends about 30 percent of its revenues to capital expenditures, the second highest “Capex to revenue” ratio next only to China. Yet despite the amount of spending, the bandwidth capacity and internet coverage in the country are still challenged.
We like to compare ourselves with countries like South Korea and Singapore, yet we fail to appreciate the fact that these countries have thriving national broadband networks put up by government to support the private sector in the interest of advancing communications development.
We hope this gives Yanto adequate information about the industry to reassess his position.
—YOLY C. CRISANTO, SVP, corporate communications, Globe Telecom