Telco investments crucial in boosting internet speed

MANILA, Philippines -  Telecommunications companies should continue investing in new technologies and facilities as well as upgrade their network infrastructure to further speed up internet access in the country, a University of the Philippines academic paper said.

The UP study, led by professor emeritus Epictetus Patalinghug, noted the rate of change of average internet connection speed in the Philippines is increasing, and this gap will soon be bridged by new investments in network facilities.

Data from content delivery network services provider Akamai showed the average connection speed for fixed broadband in the Philippines in the second quarter of 2016 increased 23 percent over the previous quarter. Mobile broadband fared even better, with almost twice the average connection speed of fixed broadband in the same period.

Akamai’s third quarter 2016 report showed further improvement as the Philippines’ average mobile internet speed of 13.9 mbps for the July to September period was the fastest in the Asia-Pacific region.

The UP paper said gaining more ground in broadband speed and service delivery will mean overcoming more barriers, however, among them the massive annual capital requirements to continually maintain and upgrade the network infrastructure.

In 2015 alone, capital expenditures amounted to 29 percent of PLDT and Globe’s total service revenues. This ranked second only to China’s 36 percent. In contrast, telecoms firms in the US spent only 14 percent of their revenues on network improvements in 2015.

For 2017, both PLDT and Globe have raised their capital expenditures for expansion of their networks and improve their quality of service. PLDT reported it plans to spend P40 billion for capital expenditures this year. The amount will be used for deploying additional frequencies, building up their fixed-line segment, and undertaking a major network expansion to improve the coverage and quality of its voice, SMS and mobile internet, particularly its LTE service.

On the other hand, Globe disclosed that it had allotted about P38 billion for capital spending in 2017, mainly for deployments of LTE services using the 700 megahertz (MHz) and 2600 MHz frequencies, increased 3G capacities, further expansion of mobile coverage, and deployment of fiber broadband technology for homes.