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The threat of competition should keep the incumbent telcos from falling into complacency
Mr. President, as you deliver your second state of the nation address (SONA) today, please allow me to talk to you about an often-praised yet an often-ignored sector – telecommunications. In particular, I want to bring to your attention the state of Philippine internet.
I’m sure you’ve been getting a lot of reports on Philippine internet – that internet penetration is growing, that internet speed is improving, and that prices are going down.
But please allow me to explain the context and clarify some of these reports.
Report: Internet use among Filipinos is on the rise. Internet user penetration continues to increase yearly. In particular, mobile broadband subscription was at 41.58 per 100 persons in 2015, more than double the number just two years before, according to the ITU’s Broadband Commission.
Context: Fixed broadband and household internet penetration have had a slow and dismal growth. In 2015, fixed broadband increased by only 0.8 from 2.6 per 100 persons in 2013, while household internet only saw 5.4 of increase from 22.9 penetration two years earlier.
One problem with internet data is that we don’t have an official, definitive source right now. So don’t be surprised if you get different and sometimes conflicting information.
Report: Philippine internet speed is improving. According to Akamai’s State of the Internet Report, the average connection speed for the Philippines was at 5.5 Mbps in Q1 2017, an improvement of 20% from last quarter, and 57% compared from a year ago. In fact, it’s safe to predict that internet speed will always improve over time given technological advancements and cheaper international bandwidth, which are guaranteed (all else being equal), and the improving purchasing power of consumers.
According to another test by Measurement Lab (M-Lab), which provides the largest collection of open internet performance data globally, the Philippines’ average connection speed was at 7.6 Mbps in Q1 2017, a significant increase compared with pre-2015 results.
Context: The Philippines has the slowest average internet speed in Asia Pacific for the past two consecutive quarters, according to Akamai’s report. Other countries which used to be laggards have improved and left us behind. Indonesia sped past us in Q1 2014. Vietnam overtook us in Q2 2014. And India leapfrogged over us in Q4 2016.
The improvements ininternet speed is also for FIXED or WIRED connection, which comprises less than 5% of internet use in the country. Both Akamai and M-Lab measurement were focused on fixed internet connection. M-Lab’s results, in particular, point to a huge improvement in the internet speed of public institutions, thanks mostly to the government’s initiative to promote local IP peering through the Philippine Open Internet Exchange (PHOpenIX). Mobile internet is a different issue.
Report: PH’s mobile broadband speed is one of the fastest in Asia Pacific. Akamai’s Q1 2017 State of the Internet report did show that Philippine mobile data, at one point, registered 8.5 Mbps (Q2 2016), 13.9 Mbps (Q3 2016), 14.3 Mbps (Q4 2016), before dropping again to 8.7 Mbps (Q1 2017).
Context: Unfortunately, the Philippines’ mobile connectivity speed does not qualify for inclusion in Akamai’s analysis, although its data was included in the report for reference only. This is because the Philippines is the only country in Asia Pacific that did not meet the required minimum data of 25,000 unique IPv4 addresses classified as mobile. Winthrop Yu, chair of the Internet Society Philippines chapter, also points to the use of proxies and how these could influence mobile measurements. To address this problem, Akamai is working to better understand the mobile network architecture of the Philippines.
OpenSignal offers speed results based on measurements to end-user devices. According to its State of Mobile Networks Q1 2017 report, the Philippines was found to have the second slowest 3G and 4G speeds out of the 87 countries surveyed.
Report: Philippine mobile internet is one of the cheapest in the world. If you looked at the nominal value of the latest data promos, you can get 1GB of data for 50 pesos or $1.
Context: Affordability should be measured based on the cost of internet (or of any good or service) vis-à-vis the ability of consumers to pay. ITU recommends that entry-level broadband service should not cost more than 5% of a household’s average monthly income. Given this affordability threshold, Philippine fixed broadband and mobile broadband (postpaid, 1GB) are unaffordable. Meanwhile, the Alliance for Affordable Internet (A4AI) proposes a lower threshold of 2%, as this would truly enable lower-income citizens to afford broadband. Again, Philippine broadband service costs beyond the threshold.