Telco shakeup

Finally, the political will to address a major national economic problem — slow internet and poor telecommunications service. President Duterte has offered China a slot to become the third major telco player in the country, a move aimed at breaking the much criticized duopoly of Globe Telecom and PLDT Inc.

The President, who reportedly made the offer during his meeting with Chinese Premier Li Keqiang in Malacañang two weeks ago, warned the two telcos last year to shape up or face new competition.

The Philippines’ data and voice services are among the slowest and most unreliable in the Asia-Pacific region. The Philippines ranked 94th out of 121 countries for mobile internet, and 91st out of 131 countries for fixed broadband, according to the Speedtest Global Index study in September.

In both categories, the country was outranked by five of its Southeast Asian neighbors — Cambodia, Vietnam, Thailand, Malaysia and Singapore.

PLDT and Globe have also been accused of stifling competition and of failing to make necessary upgrades to improve services. They joined forces last year to buy for P70 billion the radio frequency assets, including those in the coveted 700 megahertz (MHz) band, from a potential rival, San Miguel Corp.,
purportedly to upgrade their services.

Much earlier competitors — Sun Cellular of the Gokongwei family and Bayantel of the Lopez family — were also acquired by the duopoly and left perhaps until their natural deaths. The 700 MHz is a low-band frequency prized for its ability to efficiently cover wide distances and penetrate buildings. Still, the duopoly’s services remain lacking to date.

To show that the government is serious this time around, President Duterte has ordered that all applications from prospective new telco players be filed in the Office of the Executive Secretary, which was given 45 days to act on them.

This latest announcement ties in perfectly with the government’s signing two weeks ago of an agreement with an affiliate of Facebook to put up high-speed internet infrastructure with a capacity almost equal to that of Globe and PLDT’s combined.

The project will build an “ultra high-speed information highway” that the government promised would improve the speed, affordability and accessibility of broadband internet across the country. Presidential spokesperson Harry Roque noted that this deal would have been signed as early as December last year were it not for “delays” allegedly on the part of then Secretary Rodolfo Salalima of the Department of Information and Communications Technology.

The seriousness of the government can also be seen in Congress, which is moving fast to remove telecommunications from the list of industries where foreigners are restricted to owning a maximum of 40 percent. Sen. Grace Poe, chair of the Senate committee on public services, earlier filed Senate Bill No. 1441, which sought to amend the antiquated Public Service Act to limit the definition of “public utility” to natural monopolies, which are the transmission and distribution of electricity, and waterworks and sewerage systems.

All this talk about a third telco player would not have arisen had the services of the duopoly been better. But the country had languished below the global internet speed and service availability surveys.

Even with the acquisition of the telco assets of SMC that they claimed they needed to improve their service, nothing much has changed since.

Perhaps a third major player is truly the only answer. As Senate President Aquilino Pimentel III pointed out, a third telecommunications firm is exactly what our country needs “to end a telco duopoly mired in mediocrity; a situation that has allowed them to hold the Filipino consumer hostage to poor communications and data services.”

The absence of alternatives, he added, has numbed Filipinos to the reality of poor network coverage, dropped calls, disappearing loads, lost text messages, and slow data or internet speeds.

Perhaps Filipino consumers have reason to be hopeful this time around.