Is PH telecom moving fast enough?

18 Mar 2013

“Arangkada” is a Filipino word which roughly translates to “move fast” or “accelerate.” The Joint Foreign Chamber (JFC) in the Philippines chose this term to call its advocacy paper of recommendations that could potentially lead to job creation, foreign investment, and revenue. To achieve these outcomes, the JFC posits that the country must focus on fast tracking reforms in what it labels as the “Seven Big Winner Sectors”, one of them being telecommunications.

It was a privilege to be invited as one of the assessment experts on telecom. Given a list of key reform areas, the exercise gave me the opportunity to step back, reflect on the past year, and look at the telecom and ICT sector from a broad perspective. The scoring method was simple and based on whether there was any movement in key recommendations or none. Experts had to substantiate their scores by citing references and examples. In short, the scores had to be based on fact, not impression.

Of the JFC’s 11 recommendations, three things stood out for me as areas where the government can and should initiate the reform.

Overhaul of RA 7925: Public Telecommunications Policy Act, updating it to authorize full convergence.

In less than two years time, the telecommunications law will be 20 years old. Since it was passed in 1995, technologies and markets have undergone a lot of transformations. Mobile phones have not only overtaken fixed lines, they have also become smarter. Similarly, internet connection is no longer dependent on fixed lines; there is cable, 3G, 4G, and LTE. And some say there is promise in TV White Space. Free WiFi is common in urban areas, and computers now fit the palm of our hands.

Competition among three telcos expanded access and improved service in mobile and broadband. But the third player was eventually bought out, leaving the telecoms market with, practically, a duopoly. Any form of regulation on pricing and service is generally ignored, contested in the press, or brought to court. The spirit of RA 7925 is still very much relevant, but it needs to cope with the telecoms sector. Senate Bill 3277 or the Magna Carta for Philippine Internet Freedom filed by Senator Miriam Defensor-Santiago in November 2012 includes provisions to update RA 7925, particularly the responsibilities of the National Telecommunications Commission (NTC).

Include a National Broadband Roadmap.

The ICT Office under the Department of Science and Technology (DoST) has adopted the Philippine Digital Strategy, a five-year roadmap for ICT promotion and development, which pushes for investment in broadband. It has been in consultation with various stakeholders for the drafting of a National Broadband Plan. Other than this, no major developments have been documented. Which country serious in its efforts to improve connectivity does not have a national broadband plan? If the current administration could issue one soon, it would have accomplished a big chunk of the job.

Upgrade the speed of broadband and expand coverage.

The government must examine the need for, and benefits of, defining the minimum broadband speed against which the quality of ISPs’ services should be gauged. The Akamai State of the Internet report measured the country’s average connection speed at 1.1 Mbps, which is not even considered broadband in global standards.

The next issue is a chicken-and-egg situation. Broadband uptake remains dismal (at 7%) because of cost. Telcos will offer service where there is a market. What can government do? Determine the broadband needs of key sectors, which can potentially drive investment and initiate infrastructure development in pockets of areas. Where critical demand has yet to emerge, government offices can be the primary client of broadband. The fast-growing use of smartphones and mobile Internet is increasing, and with it, a greater expectation for speed and bandwidth. With dropping prices, the government should figure out how smart devices and mobile technology can be used not only by individuals and households, but in public internet access points beyond the A and B markets, as well as outside of urban areas.

If there would be progress in these areas in the coming years, then we could say that the telecoms sector was moving fast enough.

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