Wednesday 3 May 2017

Internet speed, etc.: Will the Telecom Industry be better if Government becomes the 3rd player?

It was in 2011 when a United Nations report declared that internet access should be a basic human right, probing that disconnecting an individual from use of such was a violation of human rights and international law. 

Therefore, if use of internet is a basic human rights, shouldn't Filipinos be more angered because of the poor internet quality or lack of service we are getting from the internet providers here in the Philippines?

The country's most diversified conglomerate, San Miguel Corp., and Australia's biggest telco company, Telstra Corp.,could have been the "game changer" in the Philippine Telecommunications industry. Telstra was planning to invest up to $1Billion in the proposed joint venture, consumers could have benefited from better and cheaper service. The infographic above was supposed to be the direct comparisons with the two existing Telco player in the country(photo credit to

Smart and Globe have been playing duopoly in the Philippine market, controlling the price, internet connectivity(speed) without a clear parameters as to the quality of service since they know we consumers don’t have the choice. 

There were plans for a third player to invest in the Philippines, thru San Miguel Corporation , Australia’s Telstra Corp. Ltd- Australia’s largest telecom player and known for being a reliable source of Internet connection not only in its home country but several parts of Asia Pacific (ASPAC) region. But sadly, this plan fizzled out and were still stuck with Smart and Globe.

Smart is majority owned by an Indonesian magnate Anthoni Salim thru PLDT Chairman Manuel Pangilinan and Japan’s state controlled Nippon Telephone and Telegraph. And Globe Telecom has Singapore Telecom a Singaporean based telecommunications company- “one of the largest mobile network operators in Singapore and the 20-30 largest in the world” (Wikipedia).

In a previous log entry I was able to present the true identity as to who really owns and profits from Smart-which claims to be the no.1 Telecom player in the Philippines ( of course this is disputed by Globe). 

By applying our Constitution it is quite clear that the strict rules provided therein No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens;...( Sec. 11, Art. 12, 1987 Constitution)- that made a very good circumvention of the Constitution to where they are now.

As always it is more advantageous if we have more players in this industry, that is majority owned by Filipinos. Not only for purposes of complying wholly with the laws of the land but also to the benefit of all consumers in the country.

An infographic regarding our ranking as against our peers in Asia with respect to Internet speed (2015) (photo credit to the owner)
There is study recently that suggest that the Philippine Government itself should be the 3rd player in the Telecom industry ( May 4, 2017):

Unless the government steps in and establishes a state-owned telecommunications firm, the prospect of a third player in the industry is low, a study finds.

According to Epictetus Patalinghug who, together with three other professors from the University of the Philippines, wrote the study titled “Assessment of the Structure, Conduct, and Performance of the Philippine Telecommunications Industry,” the only viable third player is the government who has the money to build infrastructure in remote and difficult-to-reach areas and to complement existing networks.

“The only realistic third player is the government, but its social value is its cost-insensitive capacity to pour investments in 'last-mile' and high costs areas, and to build 'last-mile' network that complements with existing networks,” he said in a recent speech at the Asian Institute of Management, stating some of the conclusions of their study.

Patalinghug however has his apprehensions on a possible government entry, citing the history of government in failing to operate utility services.

“[H]istorical experiences of government failures in direct provision and operation of utility services are rampant,” according to the study.

Load disqus comments