The myth of broadband in the Philippines

10 Sep 2014

The Philippines’ two major telcos, PLDT and Globe Telecom, are on an infrastructure investment roll. In July, PLDT announced completing its domestic fiber optic network worth 700-million pesos in Bohol province. In August, PLDT signed on to the Asia-Africa-Europe 1 (AAE-1) project, joining 17 other operators to deploy a 25,000km subsea cable system. Meanwhile, Globe is investing $80 million in a submarine cable directly connecting Southeast Asia and the United States (SEA-US) slated for completion in 2016.

Year after year, PLDT and Globe spend billions of pesos in capital expenditure to expand and improve their domestic backbones and international connections. In 2013, Globe and PLDT each reported a capex of about 29 billion pesos ($663.3 million). The year before that, PLDT alone spent over 36 billion in capex, which, one expert notes, had not fallen below 20 billion pesos since 2006.

This is all good news, of course. But despite the hundreds of millions of dollars reportedly allocated by telcos to expand and improve connectivity, ordinary Filipino internet users are left scratching their heads asking: Why is my internet still slow?

The telcos can easily dismiss these anecdotes as subjective. Unsatisfied customers do tend to exaggerate their user experience after all. But there are so many diagnostic tools out there that can quantify the customer’s frustration and agitation.

In the first quarter of 2014, I carried out a broadband quality of service experience (QoSE) test of Philippine ISPs as part of a study by regional ICT policy think tank LIRNEasia. Using the AT Tester, a diagnostic tool for QoSE jointly designed with IIT Madras, I conducted tests using basic data plans being offered by the country’s three major ISPs (Smart, Globe and Sun).

The QoSE tests were conducted on multiple days (2 weekdays and 2 weekends) and at multiple time slots (including both peak and off-peak hours) throughout the day. It uses different domains (local ISP, national and international servers) and measures six metrics, including download and upload speeds, latency, jitter, packet loss and availability.

By far, the AT Tester is incomparable because of this rigorous methodology. As a result, LIRNEasia’s QoSE-based research has been used to inform the policies of regulators in countries like India, Mauritius, and Maldives. The AT Tester method is currently being implemented by the Bhutanese regulator.

The findings of the Philippine QoSE tests were expected, but nevertheless still disappointing.

The best performing among the three ISPs delivered only 21% of actual versus advertised speed on average. This same ISP also offered at least 256 Kbps download speed (generally accepted definition of broadband) only 67% of the whole time it was tested, falling short of the required 80% service reliability.

The Broadband Commission defines the core concepts of broadband as an “always-on service” with high capacity “able to carry lots of data per second.” While there is no official definition of broadband locally, the Philippine Digital Strategy 2011-2016 defines broadband internet service as 2 Mbps download speed.

Finally, like the last nail in the coffin, Philippine ISPs performed the worst in terms of value for money when compared to select providers in South Asia and Southeast Asia. The highest value given by any of the three Philippine ISPs tested was a measly 22 Kbps per US dollar. This figure is too low when compared to similar mobile broadband ISPs that offer 173 Kbps per dollar in Jakarta, Indonesia and 445 Kbps per dollar in Colombo, Sri Lanka.

These results have huge implications on truth in advertising, consumer welfare, and the need for appropriate regulation.

Since the connections are intermittent and average download speeds too low, should PH ISPs stop selling these basic data plans as broadband internet service? As Prof. Rohan Samarjiva of LIRNEasia asks, “What is the point of applying definitions to advertising, when real performance suggests that many operators… do not offer true broadband?”

Finally, the overused and abused argument that “internet is just a value-added service hence deregulated” stops where consumer welfare begins. Broadband internet should be treated like any paid service; there is no sound and legitimate reason (legal or otherwise) not to make providers accountable for the quality of service that customers pay for. And if there was any law that “prohibits” regulation to ensure the protection of consumer rights... Never mind, no such thing anyway.

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