Internet in Phl

The Philippines continues to lag behind its neighbors when it comes to Internet connectivity, a recent report from market intelligence company International Data Corp. (IDC) revealed.

But the good news is, IDC expects the information and communications technology industry in the country to be in a continued upswing this year.

The IDC report noted that recent rankings on broadband Internet in Asia show the Philippines at the tail end of the list — only ahead of Afghanistan.

IDC said one factor setting the country back from getting better Internet services is its archipelagic nature. As the country is composed of 7,107 islands, it is more challenging for Internet service providers (ISPs) to build infrastructure and provide customers unfailing Internet connection. The country’s geographic makeup impedes the expansion of telecom networks to rural areas.

According to IDC Philippines associate market analyst Alon Anthony Rejano, building of Internet infrastructure in many provinces remains a work in progress because from a telco standpoint, it can be costly and is a kind of investment that may not necessarily prove to be lucrative, considering the lower number of data users in some areas.

To reach out and bring connectivity to far-flung locations, TV white space (TVWS) is being eyed as one of the solutions. TVWS is a wireless data communications standard technology that uses vacant frequencies located between broadcast TV channels to provide wireless data connectivity to remote communities in the country, IDC explained.

The report cited plans by the Information and Communications Technology Office (ICTO) to deploy this wireless data communications standard technology, and pilot tests are currently being conducted.

Meanwhile, IDC said that in another move to address the country’s slow Internet, the National Telecommunications Commission (NTC) signed a memorandum last Aug. 13, setting the minimum broadband speed at 256Kbps. The NTC also compelled service providers to disclose to the public their average data rates per location.

The report pointed out that no organization in today’s cutthroat environment is immune from the disruption brought about by the ever-changing customer demands and the rise of 3rd platform technologies. As the industry moves toward the digital era, companies are requiring higher amounts of bandwidth more than ever. For companies to enjoy the full benefits of these new technologies, good Internet connection is an important factor. IDC believes that an improved Internet connection can make way for more bullish growth in the commercial ICT sector.

In the commercial space, IDC said the new regulation on minimum Internet speed may affect small offices and home offices (SOHOs), but is not likely to have any significant impact on medium-sized businesses and enterprises (large and very large businesses). Internet subscriptions of medium-sized businesses and enterprises would typically involve a committed information rate (CIR), which already serves as the minimum speed that an ISP is compelled to provide them based on the service-level agreement (SLA) between the two parties.

SOHOs, on the other hand, would usually opt for consumer-targeted Internet subscriptions that do not involve CIR and SLA. Therefore, they are the ones that are most likely to be affected by the minimum Internet speed. While there is some backlash on the minimum speed set, technology lobbyists argue that a minimum speed of 256Kbps is still too low. IDC believes the minimum set speed is already a good move toward effecting change in the country’s telecommunications industry.

IDC Philippines market analyst Jerome Dominguez said setting a new minimum Internet speed is a step toward the right direction as it provides users a safety net. In an instance that ISPs fail to provide the minimum speed of 256Kbps 80 percent of the time, they can now be held liable as sanctions could be imposed on them by the state, he added.

The report also emphasized that another concern raised by the recent Ookla rankings is the Internet cost, in which the Philippines ranked as one of the most expensive in the region, averaging at $18 (P840)/Mbps compared with the worldwide average of only $5 (P230)/Mbps.

But while the high cost of the Internet in the country may be hurting consumers’ pockets, on the commercial side, IDC believes this may have minimal impact on potential foreign investors.

Karen Rondon-Garcia, research manager, IDC Asia/Pacific, said for foreign investors looking to set up businesses in the country, the cost of Internet services can be a factor to consider, although they are unlikely to decide against investing in the country just because of it, unless the company’s core business would run on the Internet.

She said other factors such as manpower availability, labor cost, infrastructure cost, government regulations, political stability, security, and cost of raw materials (for manufacturing firms) would usually still take precedence over the cost of Internet in an investment decision.

For Internet-dependent companies, the role of the Internet is to enable business growth for business automation as a competitive tool. This is important to provide quality customer experience and have a competitive edge in innovation. However, if the connection is slow and unsteady, it may mean loss of productivity and money for the enterprise, IDC said.

It added that Internet is key in a progressive economy and therefore, it is important for the government to study closely the existing laws and regulations that should be strictly implemented, and identify what additional regulations are required. Right now, the government is addressing Internet- or infrastructure-related issues in silos, but it should focus on the entire picture as far as addressing the Internet situation in the country is concerned.

The efforts of the government, with the help of the private sector, in championing the country’s campaign to improve availability, quality, and affordability of Internet services would be the key. This includes finally putting in place a comprehensive national broadband program that would not only interconnect government agencies, but also more importantly prove the government’s commitment to an improved connectivity in the country, the report stressed.

IDC also said that connectivity between countries and economies is intensifying across a number of parameters. In particular, infrastructure is a primary component of regional connectivity, particularly in the electricity, telecommunications, transportation, and water industries. As we enter a new era of the digital age, investments in virtual infrastructure should be given the same priority and focus as investments in physical infrastructure to improve the exchange of goods and services and pave the way for a healthier ICT industry, it noted.

I thought my Internet connection was bad. But then I realized that subscribers in other more developed countries are also having connection woes. I had online classes where some of the participants are based in the United States, Europe, and China and they too suffer from connection problems.

The problem with broadband Internet rankings is that they rate the whole country. And Metro Manila can have better connection than the provinces. So these rankings may not reflect the true picture.

I agree with IDC that setting up infrastructure in an archipelagic nation like the Philippines can be problematic and costly. We appreciate the efforts of ISPs to improve connectivity, but this has got to be a government-private sector joint effort to improve Internet infrastructure. Just like in other countries, the government has to do its part.

For comments, e-mail at [email protected]