What PH telecom consumers actually get

15 Mar 2017

Last week, the Philippines had its first Telecommunications Summit organized by the newly created Department of Information and Communications Technology.

I was given the great opportunity and daunting task of presenting the top consumer issues on telecoms. As expected, the discussion revolved around internet service, particularly access, quality, and cost.

Although I’m very passionate about consumer woes—and it’s very easy to get carried away—I showed the results of studies and analyses by third (mostly disinterested) parties, as researchers are wont to do.

I gathered statistics from Akamai Technologies, OpenSignal, The Economist Intelligence Unit, ITU’s Broadband Commission, and Measuring the Information Society reports. For validation, I threw in some of my own research done for LIRNEasia and a latest collaboration using Big Data analytics.

What was common in these studies was that the country’s internet service is improving, but continues to be one of the slowest and most expensive in the region.

The Philippines had 3.4 per 100 people subscribed to fixed broadband and 41.6 subscribed to mobile broadband in 2015. What do Filipino consumers get in terms of quality and cost of broadband services?

What do these subscribers actually get?

Akamai’s State of the Internet (SOTI) report has consistently placed the Philippines as having the second slowest fixed broadband average connection speed in the Asia Pacific region over the past several quarters, better only than India. In Q4 2016, however, India was seen zooming past the country, with average connection speed now at 5.6Mbps, compared to the Philippines’ 4.5Mbps.

In my own research collaboration with Wilson Chua, a Filipino Big Data analyst based in Singapore, and Chris Ritzo of Measurement Lab (M-Lab), based in Washington, D.C., we saw an improvement in fixed broadband download speeds for the Philippines after 2015. Further probing revealed that peered networks and public institutions connected through the government’s fiber optic network contributed to the Philippines’ increased bandwidth. Interesting to see how much more can be improved in the coming years given the government’s national broadband program.

ITU’s Measuring the Information Society report revealed that entry-level fixed broadband in the country costs 7.5% of a household’s average monthly income in 2015, roughly 2.5% higher than the recommended affordability threshold. A positive development is that the cost of fixed broadband has been going down.

OpenSignal’s latest report on global state of mobile networks, the Philippines’s 3G/4G connection was recorded as the second slowest among the 87 countries surveyed.

Akamai’s SOTI report has data on the Philippines’ average mobile broadband connection speed. For Q4 2016, average speed was at 13.5Mbps, the highest among the Asia Pacific countries! However, the report notes that the Philippines did not meet the minimum requirement of 25,000 unique IPv4 addresses seen by Akamai and identified as coming from a mobile network. Thus, the Philippines did not actually qualify for the analysis and data was included only for reference.

In terms of affordability, a postpaid 1GB mobile broadband plan in the Philippines is still a little expensive at 6.7% of average income. However, a lower-tier prepaid 500MB mobile broadband plan is considered affordable at 1.5% of a household’s income.

The Economist Intelligence Unit offers a more nuanced analysis of affordability in it’s the Inclusive Internet report. The Philippines is ranked in the lower half of the Asian countries included in the index and 43rd out of 75 countries overall. It’s affordability rank, the report notes, is “particularly low”, at 20th out of 22 countries in Asia.

The Philippines also got the second lowest score for the sub-index of competitive environment. The report, commissioned by internet.org by Facebook, measures the competitive environment based on “the concentration of the marketplace for internet service provision.”

Given these rankings and analyses, I’m happy to note that the government’s national broadband plan is putting a priority on policy and regulatory reforms that intend to address competition and infrastructure access issues.

The telecoms summit ended on a positive note as various stakeholders signed agreements to collaborate on finding solutions. Hopefully, though, the way forward will not focus on band-aid solutions, but on changes that would truly address consumer problems stemming mainly from the lack of choice.

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