Telstra’s ability to provide faster Internet speed in doubt

MANILA, Philippines - The whistle-blower in the controversial National Broadband Network (NBN)-ZTE deal expressed doubts that the entry of a third telecommunication company led by Australian firm Telstra would result to faster Internet speeds for consumers in the country.

IT expert Rodolfo Lozada Jr. said without the government investing in a digital superhighway where the country’s digital goods could move freely, a third telecommunications player would not be able to provide faster Internet service.

While the imminent entry of Telstra via a joint venture with local diversifying giant San Miguel Corp. would boost competition in the local telco industry, Lozada said Telstra’s ability to provide faster Internet connectivity would have to be proven especially in view of the current state of the country’s digital infrastructure.

“First, competition will always be good in any marketplace. That’s a given. Competition will always be good for the consumers. Second (as to Telstra), providing for a faster Internet, that will have to be proven,” Lozada said.

Lozada is the whistleblower in the alleged anomalous $329-million NBN deal between the government and Chinese firm ZTE in 2007.

The NBN project was allegedly overpriced and eventually canceled due to public outcry after the anomaly was exposed to the public.

Graft charges were later filed against former President and now Pampanga Rep. Gloria Macapagal-Arroyo and several others.

Lozada said the problem is the country does not have an NBN infrastructure that would provide faster Internet service.

He said the country also does not have a national Internet exchange or what he called a Philippine Internet Exchange.

A broadband network, Lozada explained, is like network of expressways that enable people and goods, agricultural and industrial goods, to move around faster and more efficiently to stimulate economic activity.

“Now that we have come to an era where we are now trading digital goods, not anymore just agricultural and industrial goods, almost all the roadways, almost all the pathways for the digital goods are all privately owned,” Lozada said, referring to the local private telcos.

“That’s why we’re now the most expensive (Internet service) in the world and one of the slowest,” Lozada said.

He said nothing would happen about the slow and expensive internet in the country unless the government puts up its own NBN.

“Ten years ago, we knew already that the world would come to this,” Lozada said.

“Hopefully, the next administration will be able to have the appreciation, or the understanding that in this digital economy, we need a digital superhighway that is free and the consumers would only pay for connection fee,” Lozada said.

He noted Australia has a national broadband network built by the government.

Telstra recently disclosed to the Australian Securities Exchange it has set aside $1.5 billion in capital for mergers and acquisitions for the remainder of the year, the bulk of which could reach the Philippines through a joint venture with SMC.

Local telco industry observers had also raised eyebrows regarding Telstra and SMC’s positioning of their partnership to form a third telco as the “savior” and “third player” that would solve the problem of slow Internet speed in the country, given Telstra’s own service delivery issues in Australia.

Sources said the Telecommunications Industry Ombudsman (TIO), Australia’s agency of last resort for telco consumers, said Telstra had the most complaints filed by customers as of May this year.